Formed just over one year ago, Miami Beach-based Arkadia Property Group LLC has made its third acquisition and is on the hunt for more. "We certainly are in an acquisition mode," said David Aaron,

who joined forces with Richard Kilstock to launch the real estate investment and development company. Most recently, they bought Courthouse East for $22 million in a deal that closed July 8. The

four-story building at 22 NW First St. in downtown Miami is leased to Miami-Dade County and houses the recorder's office and parking violations bureau. The company portfolio also includes two redevelopment opportunities — a Texaco station property at 1840 Alton Road in Miami Beach and a mixed-use building at 51 Bruckner Blvd. in the Bronx, New York. Aaron and Kilstock met in 2009

when Aaron was working for a Miami developer. Kilstock, who lives in London and has real estate investments in at least seven countries, had invested in a deal Aaron was involved with. Aaron was

heading out on his own just as Kilstock's interest in Miami was growing. "My availability and his increased interest in Florida was perfect timing," Aaron said. Kilstock remains a principal in the Kilstock Organization, started by his father, Kurt. The New York-based development company has invested in cities such as Moscow, Brussels, Paris and Madrid, as well as Los Angeles and the New York area.

"Miami has grown to a point where we very much consider it a very major worldwide city," Kilstock said. "Miami is very much front and center for us now." Courthouse East is exactly the type of property

the two business partners are looking for, said Miami real estate attorney Mark Meland, a founding partner of Meland Russin & Budwick who represented Aaron and Kilstock in the purchase.

 

"It fits their investment criteria," he said. "It is an income-producing building in an area that has tremendous potential for future redevelopment." The county signed a five-year lease about six months ago

and has three five-year extension options. For now, Aaron and Kilstock are content to be landlords. But down the road, they see tremendous possibilities for the 15,000-square-foot lot that they said has

a development potential of 360,000 square feet. It sits a half-block from the Dade County Courthouse and is in the resurgent Flagler Street district that is benefitting from a $13 million streetscape improvement project. It also is about three blocks from the 11-acre MiamiCentral project that combines retail, entertainment, office, hotel and rentals with a transit hub linking the Brightline rail line to

Orlando, Metrorail, Metromover and a proposed Tri-Rail stop. "We tend to like real estate investments where there is a transportation angle," said Kilstock, who previously invested in properties along

rail routes. "When transport comes to an area, that is offering individuals the gift of time." He and Aaron were brought to the off-market deal by Whitehall Realty Advisors, which has scouted opportunities

for the company.

 

Aaron asked Meland, who he has known for many years and who represented his previous developer employer, to represent Arkadia in the purchase. Working with Meland were partner Joshua Dobin and

of counsel Maria Fernandez-Gomez. "Our team went into action to negotiate with David and Richard the purchase and sale contact, go through due diligence and assist with the loan closing," Meland said. They and their clients had to understand the lease's provisions and get comfortable with them. The acquisition was financed with a $13.2 million loan from BAC Florida Bank. The seller, Courthouse Realty Corp., is affiliated with Salomon Terner, founder of the fashion accessories company Bijoux Terner, who acquired the property for $2.6 million in 1987. "Salomon is a complete gentleman, who dealt with

us with the highest elegance in this transaction," Kilstock said. "David and Richard got along so well with the seller, it made the transaction far smoother than it could have been," Meland added.