Investor picks up two South Beach apartment buildings for $6.8M

Listing agent said finding a buyer was challenging because of properties' unfavorable debt

TRD MIAMI /
May.May 06, 2016 08:45 AM

An investor just paid $6.8 million for two 1950s-era South Beach apartment buildings with plans to renovate the units and lease them out at market rates.

The deal was announced Thursday by listing brokerage Marcus & Millichap, which represented seller Nick Molina. It includes the low-rise apartment buildings at 1035 9th Street and 1044 Pennsylvania Avenue, which have 22 and 16 units, respectively.

Molina purchased the buildings through two separate deals in April 2013 for a combined $4.425 million, according to county records. He financed those deals with a pair of mortgages from the seller totalling $2.94 million.

“The properties had unfavorable debt that needed to be assumed and we were able to overcome this challenge by identifying a buyer who understood the future potential of the assets,” Felipe Echarte of Marcus & Millichap said in the sales announcement. “[The buyer plans] to renovate the units and raise the rents to market levels to increase cash flow and take advantage of continued appreciation in the market.”

Evan Kristol and Harrison Rein of Marcus & Millichap also represented the seller, while Mendel Fellig of Judith Rosen & Associates brought the buyer.

The two buildings are garden-style apartments mostly composed of studios — 28 overall — with a handful of one-bedroom, one-bathroom residences.

Rein told The Real Deal that average rents at the 9th Street building were $1,117 per month, with the Pennsylvania Avenue property fetching a very similar monthly rate of $1,106. Depending on the extent of the renovation, he said, a one-bedroom unit along Pennsylvania Avenue could easily command $1,650 a month at market rate.

Because the sale has not yet been recorded in county records, the buyer is unknown.

Multifamily properties are becoming one of South Florida’s most hotly traded asset types. Last year, $1.2 billion worth of rental properties were traded between developers and investors in the region, with experts citing rising rental rates and demand from millennials as drivers behind the market surge.


Related Articles

arrow_forward_ios
Lord Balfour Hotel

Mezz lender forecloses on Ocean Drive hotel in South Beach

Mezz lender forecloses on Ocean Drive hotel in South Beach
119 Washington Avenue Miami Beach

South Beach office building inks lease for record $92 psf

South Beach office building inks lease for record $92 psf
1568 Washington Ave., Miami Beach (Credit: Google Maps)

South Beach dev site with multifamily, retail hits market

South Beach dev site with multifamily, retail hits market
Michael Shvo and a rendering of the project

Michael Shvo’s proposed Miami Beach tower gets haircut and approval

Michael Shvo’s proposed Miami Beach tower gets haircut and approval
Russell Galbut, Mondrian South Beach

Mondrian South Beach unit owners sue condo association and companies tied to Russell Galbut, alleging securities fraud

Mondrian South Beach unit owners sue condo association and companies tied to Russell Galbut, alleging securities fraud
Steve Witkoff and the Washington Park Hotel (Getty, Google Maps)

Ladder Capital seeks to foreclose on Witkoff’s South Beach hotel

Ladder Capital seeks to foreclose on Witkoff’s South Beach hotel
Shelborne South Beach

Shelborne South Beach unit owners lose appeal contesting $30M in assessments

Shelborne South Beach unit owners lose appeal contesting $30M in assessments
Clevelander South Beach

Party’s over: Clevelander South Beach closes after employee tests positive for Covid

Party’s over: Clevelander South Beach closes after employee tests positive for Covid
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...