Investors under contract to buy Opportunity Zone property in the Design District
The buyers plan to close before the 8,400 sf building is completed to reap OZ benefits
Developer Alex Karakhanian is under contract to sell a Miami Design District property in an Opportunity Zone to Forte Capital Management and New York-based GSI Equities, The Real Deal has learned.
The property, at 45 Northeast 41st Street, is expected to close in September for nearly $10 million, prior to completion of a building that is under construction. That benefits the buyers since it is in an Opportunity Zone, said Chaim Cahane president of Miami-based Forte Capital Management.
The roughly 8,400-square-foot building is between the Institute of Contemporary Art and the De La Cruz Collection, Cahane said. It’s also across from the recently completed Museum Garage.
Karakhanian will remain as a minority investor in the project. Records show that Karakhanian’s 45 Design District LLC paid $1.33 million for the lot in 2012.
The buyers plan to lease the space and are targeting art foundations, galleries, auction houses and international retailers, Cahane said.
Leasing rates in the high-end Design District have exceeded $200 per square foot, triple net, since developer Craig Robins transformed the neighborhood into a luxury retail destination. Robins’ Dacra, along with partner L Catterton Real Estate, developed the majority of the area. Restaurants L’Atelier de Joël Robuchon and Le Jardinier are both opening in August.
The Institute of Contemporary Art opened in December 2017, with 20,000 square feet of flexible gallery space, a 15,000-square-foot sculpture garden and more.
The federal Opportunity Zones program gives tax incentives to developers and investors who invest in distressed areas throughout the country.
In July, BH3 told TRD it’s planning a nine-story retail development in an Opportunity Zone in the Design District. The $55 million, 86,000-square-foot project at 3801 North Miami Avenue will have retail and showroom space.