The Real Deal Miami

South Beach rentals tied up in litigation hit the market

36-unit building is asking $9.5M
By Amanda Rabines | April 13, 2018 10:30AM

Gotham Apartments and Marcus & Millichap’s Arthur Porosoff (Credit: Marcus & Millichap)

Gotham Apartments and Marcus & Millichap’s Arthur Porosoff (Credit: Marcus & Millichap)

UPDATED, 5:15 p.m., May 16: A group of investors just put the Gotham Apartments in South Beach on the market for $9.5 million.

Gotham Enterprises 702 LC, led by Mel Schlesser, Arthur Leeds, Robert Gershon and Melvin Gershon, hired Marcus & Millichap’s David Cohen Arthur Porosoff and Fernando Polanco to market the 36-unit building at 702 13th Street.

The project has been tied up in litigation for almost two years. Court records show an entity led by real estate investor Raz Ofer filed suit against the owners in January 2016 after he was in contract to buy the property for $9 million and put down $1.25 million in deposits. In the suit he alleged there were discrepancies in financial documents related to the property that the sellers did not clear up. That case was settled in June 2016. However, Ofer filed another suit in September 2016 after the Miami Beach building department issued violations that allegedly were not fixed prior to the expected date of the closing and that the property allegedly does not have a clear title. Litigation has since continued and a hearing is scheduled to go before a judge in June.

Built in 1937, Gotham Apartments sits on about a third of an acre, just a few blocks south of Lincoln Road. The asking price breaks down to about $264,000 per unit. Records show the three-story building last traded for $275,000 in 1986 and was last renovated in 1988.

The property is zoned for low-density multifamily, and is located just east of Flamingo Park in the Flamingo Park Historic District. The building is 100 percent occupied, Porosoff said. It consists of six studio apartments, 24 one-bedrooms and six two-bedroom apartments.

Schlesser owns multiple properties in Miami Beach, which he began amassing in the early 1980s.

Last month, a 27-unit apartment building in Miami Beach’s South-of-Fifth neighborhood traded hands for $14.6 million . Nearby, a planned Hampton Inn at the Continental on Collins hotel, recently hit the market, and is expected to fetch about $40 million, according to brokers.