Swire Sells Florida Development Project to Kushner JV for $49M

Hong Kong’s Swire Properties has sold another piece of its Florida real estate portfolio for $49 million, as the blue chip developer continues to liquidate assets at the same time that its parent, Swire Pacific, struggles to deal with ongoing losses at its Cathay Pacific unit.

In a pair of separate transactions, Swire Properties’ US unit sold a Fort Lauderdale development site assembled from a trio of plots to a joint venture of Aimco, a New York-listed REIT focused on apartment properties, and Kushner Companies, the developer led by Jared Kushner, the son-in-law of former US president Donald Trump.

The JV, in which Aimco holds 51 percent and Kushner the rest, plans to develop a four-tower mixed-use project at 200, 300 and 520 Broward Boulevard in the seaside resort city 25 miles (40.2 kilometres) north of Miami.

The $700 million project’s first phase envisions Fort Lauderdale’s tallest building at 48 storeys and 546 feet (166 metres), with its 1.73 million square feet (160,722 square metres) comprising 956 apartments and 23,752 square feet of commercial space, according to a report by the South Florida Business Journal.

Cash-Out Continues

A local affiliate of Swire Properties had acquired the development sites in Fort Lauderdale’s west-central area for a combined $14.2 million in 2006 and 2007, the Business Journal reported. The project, tentatively called Broward Crossing, won a zoning change last May enabling its new owners to develop a taller, higher-density complex more in line with the downtown district just to the east.

The latest deal, which closed this month, follows Swire Properties’ disposal of three buildings at its $1.05 billion Brickell City Centre mixed-use complex in Miami in the last few years.

In October, Swire announced the sale of the 352-key East Miami hotel, which represents the hospitality element of the Brickell City Centre, to a joint venture between funds managed by Honolulu-based Trinity Real Estate Investments and New York-headquartered Certares Real Estate Management.

The five-star accommodation in the southern Florida financial hub of Brickell had been the second hotel asset in Miami for Swire, which continues to hold a 75 percent interest in the Mandarin Oriental Miami.

In mid-2020, Swire sold its two office buildings at Brickell City Centre for $163 million. Both 130,000 square foot buildings were bought by affiliates of Northwood Investors, according to Business Journal, which first reported the deal.

Turbulent Ride

Cathay Pacific, which is among Swire Pacific’s biggest businesses, recorded a HK$7.6 billion ($973 million) loss in the first half of 2021, and with Hong Kong’s border reopening on indefinite hold, the airline projected losses of more than $128 million monthly through the end of last year, according to the conglomerate’s interim report released in August.

Swire credited a strong cargo performance and cost savings for narrowing Cathay Pacific’s loss from HK$9.9 billion in the first half of 2020. But recent events tied to China’s zero-COVID policy have clouded the outlook for Hong Kong’s flag carrier.

The airline suspended all cargo flights for one week at the start of this year, citing stricter quarantine requirements for air crews, and last week Hong Kong announced it would suspend all transit flights through the global financial hub for one month.

With the aviation business in trouble, Swire Properties has liquidated close to $1.9 billion in investment properties and other assets over the last 18 months, according to Mingtiandi’s tally.

Sixth-generation scion Merlin Swire announced last May that he was stepping down as chairman of Swire Properties and Swire Pacific, with Swire Properties CEO Guy Bradley taking over the chairman roles last August.