Griffin paid $1.1 billion for Wynwood land in a wave of pre-construction deals

Moishe Mana says he refused Griffin the first time: the 30 acres he had assembled in Wynwood were not for sale, and the buyer wanted them for a university campus. What changed the answer, Mana told The Real Deal, was the campus itself, and after three years of negotiation Griffin paid $1.1 billion for the land.

Alone, that is a nine-figure price for Miami dirt with no tenants and a seller's account of why he eventually agreed. Set it beside Vestar's approval in Mesa and Massachusetts' newest grant round, and the week starts to cohere: what is being bought in each case is the right to build a rent roll, years before the first slab is poured, which shifts the underwriting off today's income and onto rents and subsidies that will not exist for years.

In its pre-construction form, the build-over-buy trade prices a known cash flow against a cap rate when it buys a stabilized asset, and prices an approval that does not yet exist when it buys the entitlement. The logic behind build-over-buy is that new supply can clear a return existing stock no longer can after being bid up by everyone who wants it, and one step upstream the same reasoning lands on land, approvals, and the public money that makes them cheaper.

The interval between commitment and cash flow is what has changed: in an ordinary income trade, a buyer collects rent within a quarter of closing, while in the deals below the buyer collects nothing for years and, in more than one case, the coverage does not say who is financing the wait.

Griffin's purchase is the clean case because the seller has described the logic: Mana assembled the site over years, and the university proposal, rather than a higher number, is what he says turned a refusal into a sale. Whether the $1.1 billion prices the dirt, the completed approval, or some blend of the two is left unsettled by the coverage, and that ambiguity is the ordinary condition of underwriting land: the buyer pays today for a use that a university, a zoning board, and a future market each get a vote on.

Vestar's deal in Mesa is the same trade a county over: the developer won unanimous approval for Legacy Park and Gateway Crossing, a $3 billion retail, office and hospitality project on 233 acres east of Ellsworth Road, with ground slated to break in early 2028. What Vestar holds now is the approval; the coverage does not say how the $3 billion gets financed, which is the usual silence around a pre-construction bet. The entitlement can be described; the capital stack cannot yet be.

Smaller versions of the same move sit beneath it: North Palisade bought a Santee drive-in site and started a 290,618-square-foot industrial project, with Colliers handling leasing for 2027 delivery, a land purchase that converts straight into construction across a two-year gap before the first rent. Charney Companies and Tavros broke ground on a 27-story tower at 175 Third St. in Gowanus, their fifth project in the neighborhood, with more than 1,000 apartments and about 250 of them affordable.

The land leg shows its scale best outside the coastal markets, where Wafra-advised funds have invested in Liberty Development's Gulf Inland Logistics Park outside Dayton, Texas, a rail-served industrial site that has grown from about 1,150 acres to roughly 3,900 since Liberty bought the park and CMC Railroad in 2022. The size of the funds' commitment was not disclosed, so the price per acre is unknown. The acreage is the evidence: a site that has more than tripled in four years looks like land being bought ahead of the tenants who will fill it, in a product where the supply of rail-served land is finite.

The public sector is the second leg, and Massachusetts made the arithmetic plain this round: the state awarded $330 million across 403 projects in its largest One Stop round, an amount it estimates will help unlock $24.6 billion in private investment and support more than 27,000 new homes. That works out to roughly $75 of private capital for every public dollar, and the leverage is the point, since the grant does not finance the housing so much as clear the path for the capital that will.

New York runs a version of it: Tishman Speyer has asked the city's Industrial Development Agency for $92 million in tax exemptions on a 48-story tower at 99 Hudson Boulevard, where Sony is in talks to anchor and which would not be occupiable until around 2030. Public money is committed to a building that will not collect a rent for years, so the pre-construction negotiation now happens with a municipality as much as with a lender.

In Dallas, JPI closed land and construction financing for Torrington Forest, 248 income-restricted homes, using 4 percent Low-Income Housing Tax Credits and a ground lease from a City of Dallas housing affiliate, with the lender not named in the coverage.

The two legs point to a market where permission is the scarce input: grant money, tax exemptions and zoning approvals are the gates, and the buyers who can walk through them are buying the construction cycle early rather than joining it late.

Ninety-two million dollars in exemptions for a tower that will not open for a decade, and a grant round that treats $330 million as the lever for $24.6 billion, both assume the private capital arrives on schedule, which is the part of a subsidy deal that no appropriation controls.

Set all of it beside Federal Realty's purchase of The Summit: the REIT paid $508 million for the 870,000-square-foot open-air center in Birmingham, which is 92% occupied and had not changed hands since Bayer Properties built it more than 30 years ago, a stabilized asset with a known tenant roster and a three-decade operating record.

The two prices are not comparable, and the two underwriting exercises barely are. The Summit buyer is discounting rents that already exist, while the Wynwood buyer is capitalizing a campus that does not; both can be right at the same time, which makes the current market worth watching.

The supply picture makes the earlier bet legible: in Chicago, new units make up just 0.27% of the apartment stock and apartments fill in 27 days, the fastest of any large market, according to RentCafe. When standing product is that scarce, building is the rational response to demand the existing stock cannot absorb, and in principle the earlier a buyer enters that response, the lower the entry price, provided the entitlement survives.

Office tells a similar story on the demand side: Manhattan availability fell to a 2020 low in the third quarter while leasing ran 19.2 percent above its 10-year average, a combination that argues for new supply. Against it, the 10-Year Treasury held at a 19-year high, raising the carrying cost of every year between a land closing and a certificate of occupancy, the exact interval the pre-construction trade is underwriting. The length of that interval, more than the headline price, is what separates the deals that hold from the ones that have to be recapitalized.

San Francisco adds a longer-dated entry: BXP and JLL have joined the team planning a 915-foot office tower at First and Mission, with BXP consulting on development, leasing and marketing and JLL holding the exclusive office leasing mandate. A tower that size is a bet on a leasing recovery arriving before the building does.

The pipeline is really a calendar: North Palisade's Santee project delivers in 2027, Vestar's Mesa groundbreaking is set for early 2028, and the 99 Hudson Boulevard tower would not be occupiable until around 2030. Vestar's date is the nearest, and its financing is the piece the coverage leaves blank; when the $3 billion finds its lenders and its equity, the market will get its first public read on whether a unanimous approval in Mesa was worth what it cost.