If there is one thing that Miami-based Related Group regrets is that it did not aggressively acquire real estate during the downturn.
Related executive Robert Dorfman told a group of real estate brokers and investors last week that his company, which lost several projects to its lenders during the housing meltdown, was “probably” too conservative in underwriting acquisition opportunities.
On many occasions, “we were reluctant to pull the trigger and missed opportunities,” he told Marcus & Millichap’s South Florida Investor Symposium on May 26.
“If I learned anything [during the downturn,] it is to look at deals more aggressively,” he said. “We are disappointed we didn’t buy more.”
Despite its missed opportunities, Related — often in partnership with Stephen Ross’ Related Cos. in New York — has still been one of the region’s more active buyers, mostly acquiring waterfront land for future condos.
Dorfman predicts the condo inventory in Miami will be sold in a year and a half “and that’s the time it takes to put a building up,” he said.
Related can’t wait to go back to building condos and is willing to sell assets to raise money to go vertical soon, he said.
“We would like to build condos again so that will have something to do” with Related’s sale strategy, he added.
Last week, Related sold the 148-room Viceroy Miami hotel on Brickell Avenue to Pebblebrook Hotel Trust of Bethesda, Maryland. The price: $36.5 million.
In mid-May, a group led by the Related Group bought for $100 million the $161 million debt on the Omni Center north of downtown Miami. Dorfman said Related and its partners are now the Omni’s lender but declined to say whether taking control of the real estate for re-development was the motive behind the note acquisition.
He said Related bought nearly $200 million worth of distressed debt in the last three years and often made good returns keeping the borrowers in place.