The Billionaire Bet on Wynwood

0:05Lilah Burke: Welcome to Deconstruct, a podcast from The Real Deal. I'm Lilah Burke. And I'm Hannah Kramer.

0:11Hannah Kramer: Today on the podcast, we'll talk about a particularly unexpected consequence of New York City's pied -à-terre tax, plus a big dispute in a New York City real estate family and in arbitration over the Brooklyn Tower.

0:24Lilah Burke: And for our main segment, our reporter Iman El-Shahawi will join us from South Florida to talk about Wynwood in Miami. Let's jump into it.

0:36Hannah Kramer: A little over 10 years ago, Wynwood was a gritty neighborhood in Miami full of warehouses and some really funky street art. Today, it is a really bustling mixed-use neighborhood with everything from retail and restaurants to condos and hotels and still lots of street art. It's also become a magnet for billions of dollars of investment. Most recently, Ken Griffin's$1.1 billion purchase of part of the MANA portfolio in the neighborhood, where he will bring a sister campus for Carnegie Mellon University. Now, even before the MANA deal went through, we've been tracking investment coming into the Wynwood neighborhood really for years.

1:21Hannah Kramer: So today we have South Florida reporter Aman El-Shahawi with us to talk a little bit about Wynwood's evolution. Aman, thanks for joining us. Thanks for having me. So let's start with your recent story. Before the Man of Wynwood news dropped, you did what we call a map story, mapping out a lot of the investment in the Wynwood area. What inspired this story to start? The Man of Griffin deal has been a story our South Florida Bureau Chief, Catherine Kalerges, had been chasing. So kind of knew this was coming in addition to some of the other deals that we had seen earlier this year. As you mentioned or may have known, this is a record-setting sale price over a billion dollars.

2:09I think the last record-setting deal in the area was about half that. Includes 35 acres, the Wynwood Marketplace, RC Cola plant, and as you mentioned, the Carnegie Mellon University satellite campus. That is a part of a$3 billion gift made to the university, one of the largest to higher education. So really just knowing this story was coming, in addition to all the other developments and investments we've seen, is what kind of inspired it.

2:38Lilah Burke: And so tell us a little bit more about these investments that preceded the Griffin deal. What were we really seeing here? Yeah, so office has been a big one. A lot of new Class A office buildings have come to the area. The largest commercial real estate deal by sale price so far this year was actually Griffin and the Goldman family's purchase of 545 Wynn office building for$181 million. Goldman's one of the largest property owners in Wynwood, but this deal kind of marked Griffin's Wynwood debut in the area. And then you had the mixed-use Wynwood Plaza, which was recently completed. This kind of rose to fame with Amazon's 75 ,000 square foot lease for the office portion.

3:25So those two office buildings were some big ones. And then we've had a lot of residential, both condos and multifamily that were recently completed, several, multiple more in the pipeline. and just also seeing some of these larger retail lease deals as well. So it's been a good mix of different asset classes taking interest in this neighborhood.

3:50Hannah Kramer: Yeah. So we have Griffin. We have Manna, of course, who's been investing in Wynwood for decades. Goldman family as well, you just mentioned. Are there some other kind of characters, like almost repeat offenders, I want to say, who've popped up in your reporting on Wynwood Investment? Well, on the development side, we're seeing a lot of major local players like Related Group, PMG, and Relaya Group build residential. And you know, they're very active in a lot of other markets in South Florida. I think the real common theme here is the increasing interest of billionaires and this being a place where billionaires want to be.

4:32So the Bezos tie with Amazon. And then you had Adam Neumann buy a stake in Society Wynwood to set up a flow Wynwood. One of the investors in the Wynwood Plaza, Marcelo Cloude, former CEO of Spirit before they merged with T-Mobile. He's also a billionaire into VC, Peter Thiel's VC firm there. Winklevoss twins have their Gemini crypto exchange in the neighborhood. So it's really become this billionaire hub of their investments and wanting to be there, specifically with tech and innovation billionaires.

5:09Hannah Kramer: I think it's interesting when we talk about, you know, the kind of billionaire magnetism of Miami. we talk often about the residential deals, right? People buying$100 million homes on Fisher Island, on North Bay Road, on Miami Beach, right? But Wynwood is not really somewhere where you can imagine walking around through all of the warehouses and street murals, a lot of billionaires hanging out, right? Yeah, so it is very emerging still. It's interesting to see Florida's first physical trading floor. the 545 Wynn building, but then you go right outside and there's all these warehouses and murals and still some interesting characters around.

5:55So the juxtaposition of all this investment and billionaires wanting to be here is still, I would say, very early to the neighborhood. And a lot of the character of it being an arts district and having some industrial ties is still there.

6:10Lilah Burke: And so what kicked off this latest investment surge? You know, what made it from this like grittier neighborhood into this billionaire hub, as you put it? Yeah. So in 2015, the city of Miami created the Wynwood Neighborhood Revitalization District. This revamped zoning and really opened the door to more residential office retail hotel development while allowing developers to gain additional building capacity, contribute to affordable housing, parks, increased density, height. So that was really a tipping point of what kind of led to this broader development that we're seeing.

6:52Hannah Kramer: Wynwood has always been known for being this kind of gritty, artsy neighborhood with, like you said, Iman, interesting characters, right? I'm wondering, you know, with new office building coming in with lots of new residential, just different kinds of folks and neighbors at multifamily properties, how much has kind of the character of the neighborhood started to change? Or do you think that it will? So there's the Wynwood Design Review Committee, which encourages but doesn't require new development to preserve that artsy character of the neighborhood. So you'll still see a lot of murals on buildings, multiple industrial properties that have been repurposed.

7:35For example, even the bank branches in the neighborhood, they all have some higher local artists and have these murals and paintings on the outside. Office buildings and some of the hotels also try to keep that artsy vibe as well. So I think there is still this kind of effort to preserve that artsy character still. And I think that's something that, as I mentioned, the Design Review Committee encourages. but it's also just really important to locals and people who've been in Miami.

8:07Lilah Burke: So this area has seen, as you said, a lot of investment. It's changed a lot. Has it been great for everyone? I mean, have there been dark spots? Has every bet paid off? So something I was looking at was the Class A office vacancy. And in a Collier's report in the second quarter, that was at 36 % total vacancy, the highest out of any sub market in Miami-Dade County. By comparison, I think some of the other major urban core office markets, 11 to 20 percent. But I think it's still a less established office sub market compared to the ones who are doing better. It also doesn't have as much inventory.

8:50And at one point, Brickell wasn't this established office hub as it is today, and that grew relatively quickly. So I think there is still potential to Wynwood's office. On the development side, there's been some residential that, you know, we've seen stalled or don't really know the status of. But as I mentioned, some of the other players before, Related Group, PMG, Relaya Group, those developers have a very good track record and they either completed projects in the area or are well on their way to completing. So maybe with some of the newer developers or ones that are not as familiar with the area could be a little bit more trickier.

9:33So we've seen some successes already, but still some that are trying to find their way.

9:39Hannah Kramer: And I was in Wynwood last week, actually, for a TRD event. And when you're walking around, you know, there's a lot of cranes moving and you can feel that kind of excitement, right, of a neighborhood that's up and coming in that particular way. But there are also still some meaningful kinks that need to be worked out, such as they should really put in a couple of more stop signs and maybe crosswalks so that I don't almost get hit in the street by a Waymo when I'm trying to get a pastry from Zach the Baker.

10:06Lilah Burke: Not a Waymo.

10:07Hannah Kramer: Not always a Waymo. A Waymo or a Tesla is what I'm getting hit, the car I'm getting hit by in Miami every time. But, you know, there are still some kinks to be worked out for this particular neighborhood, right, Iman? So I'm wondering, you know, what you think kind of some of those priorities are for local authorities and then what that kind of makes the Wynwood of the future look like. Yeah. So one of the biggest kinks is there's no I-95 exit for the neighborhood, despite the neighborhood running parallel with the highway. The closest ones are more west towards Allapatta going to the health district or you have the exit for the design district in Midtown area.

10:47and the 545 Wynn building is right over the wall for the highway. So you can see it, but it must be so frustrating to the people who work there have to commute because you don't have direct access to get in. So you've got to drive through some of those exits I mentioned, or maybe through the city. Brightline tracks also run through the neighborhood, but there's no station to get off there. Closest one is downtown Miami. So the infrastructure needs some work. I think the That area has a lot of potential. We're already seeing some of that potential being tapped. But there are some challenges, I feel, hold it back or make it harder to become a brickle.

11:28And I think you would have some locals or maybe other developers argue that that's not the purpose. They don't want to be another brickle. But nonetheless, I think if you're going to be developing in a city, the infrastructure being up to par would really help the success of that.

11:45Lilah Burke: Okay, and just quickly to touch on the Ken Griffin deal, I was wondering if you could just tell us a little bit, you know, obviously big news for the neighborhood. What might this mean for Ken Griffin or for Moisha Manna? That's a good question. We've seen Manna kind of start doubling down on the downtown Miami area. So perhaps maybe this divesting of his Wynwood properties to focus on, you know, his ambitions on Flagler Street and in the downtown Miami area. We've seen him pick up some buildings recently, like the Pastis building. But for the most part, he's really acquiring these properties in the downtown Miami area.

12:28For Griffin, so with the 545 win, like I mentioned, that was his debut to the neighborhood. Then you have this deal where he's wanting to bring in this university. For me, I think maybe his intentions might be too early to tell or just not as clear as, you know, what Manna is doing and just like shifting his investments. You know, Griffin already has a lot going on in Brickell with his headquarters. So it could just be, you know, his expansion and trying to get his foot into some other areas of Miami as he's really committed to the area.

13:03Hannah Kramer: It seems to me like for Ken Griffin, this is, you know, a pretty aggressive continuation of his bet on Miami. So I think we're going to be watching really closely to see, you know, how bringing Carnegie Mellon into Wynwood influences all of the other developers in the area who've been betting on, you know, kind of this once industrial hub over the next few years. Iman, thank you for joining us.

13:30Lilah Burke: Thank you, guys.

13:33Lilah Burke: Okay, Lila, tell me what story you're obsessing over this week. Okay, so there has been a lot of news about New York's pied -à-terre tax, But we have a sort of offbeat story that I've been obsessed with from our colleague Caroline Spivak. Basically, New York's pied -à-terre tax is now affecting high net worth divorces. Wow. Tell me how. Well, the tax has become sort of another line item for these couples who have these$5 million pied -à-terres in New York to fight about. Now, New York divorces, I did not know this, take about two to five years to resolve, which is a long time to potentially be paying a$50 ,000 tax surcharge on your pied-a-terre.

14:21Lilah Burke: So basically everyone is trying to get their ex or soon-to-be ex to pay the tax instead of them. Some of them are trying to sell their units early. Some of them are trying to get their adult children to live in the pied-a-terre. with the idea that then it's no longer a pied-a-terre. It's a primary residence and you don't have to pay the tax.

14:44Hannah Kramer: So unintended consequence of the pied-a-terre tax could actually be a couple of our Nepo baby friends getting gifted$5 million apartments in their parents' divorce.

14:58Lilah Burke: That's definitely one possibility. Otherwise, it's really become sort of this thing that's complicated these divorces. You know, it used to be, I assume, if you had a Miami pied -à-terre and a New York pied -à-terre, okay, you know, you get the Miami bungalow, I get the New York condo. But now, one of those comes with a huge surcharge. So not really a fair trade. We have lawyers saying that they're working with clients who are trying to sort of twist the knife on their ex. So I'm going to leave this apartment, then it's going to become a pied -à-terre, and then you're going to be stuck with a huge bill.

15:37Hannah Kramer: Talk about very unintended consequences here, and also a good reminder that a lot of what drives the residential market, even as important as things like mortgage rates and economic factors are, there's a lot of emotion in all of these purchases. So funny to see how the pied -à-terre tax is playing into that as well.

15:58Lilah Burke: Yeah, and I mean, you call these unintended consequences in some ways, some of these are intended consequences. Mamdani and the controller, they've all been sort of like, well, you can sell your pied-a-terre, you know, if you don't want to pay this tax. And then that housing goes to people who live here and pay income taxes. And, you know, that's sort of maybe an intended effect. So that's one thing that they're trying to, you know, sort of get out of this.

16:25Hannah Kramer: Wow. Super interesting. We're definitely continuing to watch the effects of the pied -à-terre attacks, not just on divorced couples, but on New Yorkers as well. I know there have been reports of rollbacks this week, some of those lawsuits starting to be ruled on. So you can continue following along with that on therealdeal.com.

16:48Lilah Burke: Okay, before we go, let's go over some headlines. Hannah, you have a story for me.

16:53Hannah Kramer: I do. Quick update on the ongoing family disputes in the Harunian real estate family. These folks are big owners here in New York City. Mark Harunian is kind of at the center of a lot of these lawsuits. The latest update is that a judge threw out his defense for why he was able to pull millions and millions of dollars out of the family companies and said that he needs to pay back$16.5 million to those companies. In particular, this is a dispute between Mark and his sister. He's also in a dispute with his father. His defense in the case with his sister is basically that he says he's able to live like a king or better based on money from the family dispute because of the patriarchal setup of his father's companies.

17:44Hannah Kramer: His father, meanwhile, in the case between Jacob the patriarch and Mark the son, has this incredible quote that I love. This is from a couple years ago. But he said, I had asked God to give me a good son, but instead of giving me a good son, he gave me this guy.

18:03Lilah Burke: Woof.

18:05Hannah Kramer: He's going to be in therapy for a while over that one. Harsh criticism for a father to levy, but this is also someone who's been living very lavishly off of the family money for quite some time. So an ongoing kind of interesting family dispute that we've been covering for quite some time. Lila, I think you have another dispute for us, one that's getting quashed a little bit, right? Yeah.

18:28Lilah Burke: So recently, Floyd Mayweather, the champion boxer, dropped his lawsuit against his former investment manager, Jonah Rechnitz. So to back up, Floyd, champion boxer, had originally alleged that Jonah gained his trust and then diverted$175 million from him. Jonah has kind of a spotty past. He pleaded guilty in 2016, basically bribing an NYPD officer. He then cooperated. He hasn't served any jail time. After that, Floyd Mayweather really defended Jonah. He defended him at our New York forum in 2025, saying, you know, I trust Jonah 100 percent. It seems like he didn't totally trust him 100 percent.

19:14Lilah Burke: Then he sued him. But now he's dropped the lawsuit. A little unclear where they stand today. But we will hopefully have more information soon.

19:22Hannah Kramer: Yeah. And it's been interesting kind of trying to dig out, you know, Floyd Mayweather started making these big claims about his real estate investments, what he had, what he was doing. It's been interesting and complicated to kind of dig some of that out.

19:35Lilah Burke: Right. Right. So hopefully some more clarity on that.

19:37Hannah Kramer: And then last story for the day, Michael Stern of JDS Development was ordered not by a judge, but by an arbitrator to pay Silverstein companies some$47 million over basically insurance payouts at the Brooklyn Tower. Reminder, Michael Stern built the Brooklyn Tower, Brooklyn's tallest building, and had to hand the keys over to Silverstein a while back now. So they have control of the asset today. But they're still in this kind of complicated, you know, back and forth. This particular case is over insurance payouts from a pipe that burst a few years ago at the tower. Stern says, you know, he's allowed to keep the money.

20:20Hannah Kramer: Silverstein says they need to give it back to him. This is just an arbitrator's ruling, not a judge's. So we'll still be following this case in court probably for a while. But it's just an interesting example of how sort of fine the details can be, how many, you know, different sort of sources of money are coming into any particular project, and then how nasty the back and forth can become between, you know, developer and lender or old owner and new owner as these assets trade hands. All right. Well, that's our show for you. Thanks for listening. Our script today was written by Lila Burke and Hannah Kramer, edited by Kara Eisenpress, and our in-room producers were Mary Deduc and Usha Sukai.

21:03Hannah Kramer: Our sound engineer and post-producer is Mila Miller.