Southplace City Center fast-tracks 5- to 7-year buildout

Southplace City Center is underway to deliver residential units, updated shopping options and a hotel. The total buildout is likely to be five to seven years, though developers expect the first residential building to welcome residents in 24 to 30 months.

Southland mall in Cutler Bay is to be replaced by the Southplace City Center, a project that will include housing, dining and stores. Electra America, a real estate private equity firm, and BH Group, a Miami-based private real estate investment firm, purchased Southland mall in May 2022 and began the redevelopment process.

“The total buildout is likely to be five to seven years, but we’re moving on a very fast track,” said Joe Lubeck, managing partner of Electra America.

“Fortunately, we think that it’s a very good time, particularly for residential, as well as for the redesign and upgrading of the existing mall and bringing it more in tune with today’s standards and today’s lifestyles. We expect that the mall will be fully repositioned in the next two years and … start construction of the first residential buildings in the next six months if not sooner.”

The upgraded fully modernized mall is to include, among other retailers and facilities, Macy’s, JCPenney, LA Fitness, Regal theater, DSW and Old Navy, said Mr. Lubeck. Some 5,000 residential units will also be included.

The construction of the first residential building is in motion as demolition is in process and stores are moved.

“The former Sears building is almost 100% demolished, and that will become the site for the first residential buildings, which we are now in permits for and then eventually the building that is the former Kmart and current Ross parcel will also be demolished,” said Mr. Lubeck.

“Ross will move into the main mall itself, and that site will also become rental apartments and potentially condominiums,” he said. “It’s all moving very quickly. I have to be very complimentary of the [town] of Cutler Bay. They recognize the quality of the development team, the experts that we brought in, architects, engineers … and they’re very excited about seeing this area redeveloped and becoming the new city center.”

The redesign of the mall and retail center upgrades are being worked on, said Mr. Lubeck. Following behind will be more residential, the hotel and medical buildings. The hotel brand is still unknown, and the majority of the current stores will remain open throughout construction.

Electra America and BH Group decided to buy the mall at a time when tenants were not paying.

“Initially, the opportunity [to buy the mall] was identified by our partner Isaac Toledano [co-founder] at the BH [Group] and he brought it to us,” said Mr. Lubeck. “We had to act within a very quick period of time because the project was actually in default to its lender, many of the existing tenants weren’t paying, so we needed to evaluate the opportunity very quickly and for us, we were able to see … that having a parcel of this size in Cutler Bay could be a great opportunity, as well as not only profitability for us, but something that was truly needed in the area, which is additional dining options, additional and improved shopping options and additional residential options.”

“We moved relatively quickly, and were able to put together the necessary financing and utilizing our balance sheet for the majority of the equity.

There are only two partners in the deal: Electra America and BH,” he said.

Although the details are still unknown, ultimately the project will cost approximately $1 billion dollars, said Mr. Lubeck.

“We will be using various lenders as we go through the process for the development of the infrastructure,” he said. “There will be parks, there will be bike paths, walking trails in the lake, as well as upgrading of the water and sewer and utilities. I’m sure some of that will be supplied by lenders, and then there will be assorted lenders for the vertical construction of the residential and various other components. Generally, there’s been great interest from the banking community, both locally and nationally, to participate with us and of course Electra America and BH both have extensive holdings and very successful track records. We have a lot of options in talking to lenders.”

The type of stores that will be included in the mall will be an upgrade of the current grouping, said Mr. Lubeck, mid to upper price range, “and many of the existing retail outlets will remain and there will also be new and exciting food and beverage options that … will cover the full range from casual to fine dining.”

The developers believe maintaining relatively the same current price range of the retail stores best reflected the community, said Mr. Lubeck.

Southplace City Center is expected to benefit the community and all who visit, he said.

“We believe that this will become, as its name, the city center for southern Miami-Dade,” said Mr. Lubeck. “We think it’s going to be a great residential opportunity, giving people everything from mid- to high-price residences that we believe are needed in the community, and this will be a standard for retail, dining and entertainment for everybody in the community. In fact, we think that will certainly help the city and the county by growing its tax base and helping to keep taxes affordable in Miami-Dade.”