Estate Investments scores loan for Palmetto Bay apartments; may market as Opportunity Zone play
$34M loan is for construction of 200-unit Soleste Bay Village
Estate Investments Group just secured a $34 million construction loan for its 200-unit Soleste Bay Village in Palmetto Bay, which could be sold to an investor seeking to benefit from a federal tax incentive program.
The Miami-based development group scored the loan from Banesco USA and Spain-based Abanca for the property at 18301 South Dixie Highway, according to a press release.
Miami-based Estate Investments Group’s Robert Suris said the site could qualify under the federal Opportunity Zone program, which gives developers and investors big tax advantages for investing in certain areas throughout the country.
Suris said his accountants told him if another investor were to purchase the property before its completion date that investor could potentially gain the tax advantages for investing in a qualified Opportunity Zone project.
However, since construction has already begun on the project, if Suris and Estate Investments Group finishes building it, they would not qualify to receive tax benefits from the program under the program’s new guidelines.
The Palmetto Bay property highlights some of the uncertainty and complications around the Opportunity Zones program and what type of projects would qualify to receive the benefits. The first set of rules for the program were announced Friday.
Construction on Soleste Bay Village is already underway and the project is now at the second level, Suris said. Pre-leasing is set for late 2019 and move-ins are slated for early 2020 if the group decides not to sell the project.
The five-story rental community will include nearly 16,000 square feet of ground-floor-retail, which will include commercial tenants and live-work units, as well as 297 parking spaces. The rental property will include studio, one, two, and three-bedroom units ranging from 600 square feet to 1,100 square feet, with monthly rents starting in the $1,200’s.
EIG has five additional Soleste-branded properties throughout South Florida. These include the 338-unit Soleste Twenty2, the 330-unit Soleste Blue Lagoon, the 306-unit Soleste Alameda, the 350-unit Soleste Grand Central and the 99-unit Soleste Park View and the 251-unit Soleste Uptown.
The 350-unit Soleste Grand Central recently received approval from Miami’s Urban Design Review board and sits in an Opportunity Zone. Since the project hasn’t broken ground, Suris said the project would qualify for the program under the existing rules. He said since gaining the approval, the development group has been getting a number of calls from investors throughout the country interested in investing in the property.