Here Comes the Neighborhood
Keith Menin spent last Saturday night with a large grin plastered on his face. He had good reason to smile as throngs of fashion-forward partiers surged around him at the opening for his family's Sanctuary Hotel -- the latest entrant in South Beach's ever-expanding "boutique" condo-hotel market. In 1986, according to county records, his family had purchased the two-story apartment building on James Avenue for $650,000, subsequently running it as a quiet nursing home. Now, under Menin's eye, the rooms have been remodeled in a hip, stark, or rather Starck, manner; the soundtrack has gone from "My Yiddishe Mama" to hip-hop; and with the building's 30 units priced at an average of $400,000, a windfall of upward of $12 million is looming. Menin, as the Sanctuary's public face and day-to-day manager, is poised to become the Beach's latest boldface player -- at the tender age of 24 no less.
The Sanctuary's publicists, the TAI trio of Ingrid Casares, Tommy Pooch, and Alan Roth, were also looking fairly pleased with themselves as they worked the affair. After all, attracting folks to an open bar hardly requires a Ph.D. in nightlife science. However, drawing what club promoters refer to as a "quality" crowd, the kind of young professionals and attendant pretty young things who regularly drop hundreds of dollars on a bottle of VIP-section liquor -- or in this case, mull the purchase of $400,000 condos -- is a trickier affair. Hardly a weekend goes by now without another gala condo opening somewhere around town.
Yet here they were: Hedge fund managers and advertising execs down for the weekend from Manhattan, gliding past the more familiar clutches of model/ hostesses. Key media tastemakers had also been taken care of: Menin says overnight stays in rooms with fully stocked bars had been provided gratis to Miami Herald nightlife columnist Lesley Abravanel (with her editors' assent) and staffers from Ocean Drive. The New York Post's buzz-producing "Page Six" would dutifully gush that New York Giants tight end Jeremy Shockey had been "ogling eight topless models frolicking in the shallow end of the pool." If those sixteen breasts were in actuality a single pair covered by artfully applied pasties, well, no one except perhaps Shockey was going to complain about the mammary inflation.
Still there was a lot more at stake than merely creating word-of-mouth for another high-end hotel. As Keith Menin made clear a few days later, it wasn't just 30 new condos up for sale -- an entire neighborhood was about to go on the auction block.
The Sanctuary Hotel lies in the midst of the Collins Park district, an area filled with largely nondescript low-slung buildings stretching from 17th Street north to 24th Street, and from Washington Avenue east to the Atlantic Ocean. At its heart is the Beach's new "cultural campus," where the Bass Museum of Art, the Miami City Ballet, and the new regional public library surround what is about to become a large, grassy park (after demolition of the old library building).
Certainly if the mainland's Performing Arts Center can serve as an investment draw for the string of high-rises sprouting up around its construction site, a similar turn for the Beach's "cultural campus" seems imminent. Factor in the proximity of both Lincoln Road and clubland, as well as the beach itself, and you have a previously sedate area ready to explode. At least that's the way Menin sees it.
Of course, it's hard not to share Menin's excitement as he continuously jumps up midsentence. One minute he's waxing poetic on the Sanctuary Hotel and its pampered guests' "lifestyle"; the next he's thrusting a bag of organic Gummy Bears into Kulchur's hands. "We're the only hotel in America to carry Whole Foods products," he crows before grabbing his ringing cell phone.
Hoping to slow Menin down, Kulchur tries to throw a damper on the conversation.
Aren't you worried about a real-estate bubble? Isn't all this talk a bit reminiscent of the dot-com craze?
"Sure, sure. Five years ago if you didn't day-trade, you were a nobody," he chuckles. "I was a day trader myself. Now those same people are all into real estate." But Menin says his boundless optimism derives from a key analyst -- his uncle, who pops into Menin's office as if on cue.
Keith Menin's name may be a new one on the scene, but his uncle's is familiar to any long-time observer of Miami Beach: Russell Galbut. With roots tracing back to the Fifth Street drugstore/ diner his grandfather opened in 1935, Galbut's extended family of brothers and cousins grew into one of the largest landowners on the Beach, selling hundreds of millions of dollars' worth of condos here over the past few decades -- not to mention similar projects across the country. (See "Hot Properties," New Times, April 6, 1994.)
Yet despite that sprawling portfolio, the 52-year-old Galbut is wary of journalists, having drawn a spate of bad press in the mid-Nineties over his association with former Miami Beach Mayor Alex Daoud, who went to prison in 1993 after pleading guilty to taking bribes, tax evasion, and obstructing a grand-jury investigation.
While he has let fellow developers like Ian Schrager and Craig Robins garner the lion's share of glossy-magazine profiles, Galbut can't help but draw his own headlines with condo-conversion deals such as last April's $190 million purchase of the 1300-unit Mirador apartment complex on the Beach's West Avenue -- the most expensive apartment sale in South Florida history.
On that note, the Galbut family's current holdings are difficult to pin down, being owned through a web of companies, including Crescent Heights, 5222 Development, and Andrew Properties. Galbut is a bit coy on just how much of Collins Park his family owns -- "a fair amount," he quips with a suggestively raised eyebrow.
He also dismisses Kulchur's suggestion of a bursting real-estate bubble, noting the price per square foot for Miami residential property as compared to projects he's developed in Los Angeles, San Francisco, and New York City. "There may be an oversupply here," Galbut explains, "but it's all undervalued. On a national basis, values in South Florida are still cheap." Pointing to capital flowing in from Latin America and Europe, he adds, "On a global basis, the value here is even cheaper." And, he stresses, all of his real-estate forecasting derives from a business philosophy that is essentially conservative. "We're not Jorge Perez [of the Related Group]. We've never built anything from the ground up," he says of his family's South Florida developments, all condo conversions of existing structures from 1993's Decoplage on Lincoln Road to the Mirador. "The profits may be substantially less, but so is the risk."
It's all a bit much, especially since Kulchur is still trying to wrap his head around just what's inside an organic Gummy Bear.
Sounds like you've got the future of Collins Park pretty well mapped out. What's next? Which is the next hot neighborhood?
Menin jumps in before Galbut can speak: "Oh no!" he jokes. "You have to pay him for that one!"
Next week: Collins Park residents contemplate the condo life.
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