A $1.2 Billion Miami Land Deal Has Fallen Through

By Barbra Murray

Kuala Lumpur-based gaming and resorts owner Genting Malaysia’s deal to sell a 15.5-acre collection of waterfront parcels in Miami to an investment group led by local developer Terra has gone kaput, the Wall Street Journal reports. Subsidiaries of Genting and Terra had entered into a conditional sale and purchase agreement in April 2023, laying the groundwork for a trade valued at just over $1.2 billion. But the arrangement fell to pieces in June when the Terra team couldn’t settle with Genting on the terms of the deal and the timing of its execution. In a statement released on June 22, Genting disclosed AmInvestment Bank’s announcement that Terra had requested an extension of the exclusivity period as well as other amendments to the original terms of the agreement. The requests were denied and the Terra team subsequently terminated its bid for the four-parcel property.

The failed transaction in Miami, which is one of the most coveted commercial real estate markets in the country among the investment community today, is a sign of the times. Financing is hard to come by even for a company like Terra and for a prime piece of waterfront property in a desirable market. Deals that would have attracted a bevy of eager lenders pre-pandemic are just not happening right now. High interest rates are making it difficult for borrowers to secure reasonable financing, and even for those who can digest the elevated rates and have the robust sponsorship to back it, lenders’ increasingly stringent qualifications present a hurdle. As a result of the challenging financing climate, commercial property transaction volume will continue to be stifled. Interest rates will have to come down to a more palatable level and lenders will need to loosen their purse strings if the commercial real estate market is to see a comeback in transaction activity. Still, deals do transpire despite the frosty lending climate, and as Genting noted in the press release, “Nevertheless, the purchaser remains interested in the Miami land.” So this may not be the last we hear of Terra’s pursuit of the oceanfront site.  

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