Avra Jain plans to benefit from Opportunity Zone for Midtown office building

Jain is planning to build a 15-story office building at 225 Northeast 34th Street

Avra Jain and a rendering of 225 NE 34th Street
Avra Jain and a rendering of 225 NE 34th Street

Avra Jain is a believer in Miami’s Midtown office market.

The area, near Wynwood and the Design District, has thousands of apartment and condo units recently constructed. In addition, some of the neighborhood is also in a federally designated Opportunity Zone, allowing Jain, a former Wall Street bond trader, to take advantage of substantial tax breaks.

Jain is planning to build a 15-story office building at 225 Northeast 34th Street with $33 million in Opportunity Zone money, she told The Real Deal. Jain’s company, Vagabond Group Consulting LLC, partnered with Los Gatos, California-based Bauen Capital to create an Opportunity Zone Fund. The office building will be built on top of an eight-story parking deck and will have a large green space. It will be combined with an existing 47,000-square-foot building that includes Anatomy Gym.

In 2017, Jain, Joe Del Vecchio and partners paid $13 million for the property at 3415 Northeast Second Avenue in Miami. It included the three-story, 52,500-square-foot building with the parking garage. Altogether the land totals 35,320 square foot, according to property records.

Jain said she is looking to fill a void in the market by creating a creative Class A office building for entrepreneurial and tech tenants looking to build their businesses in an Opportunity Zone.

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Construction of the new addition is expected to begin in six to 12 months, according to Jain, who is best known for redeveloping the historic Vagabond Hotel in Miami’s MiMo district.

Jain was one of the first developers in Miami who sought to take advantage of the Opportunity Zone tax break. Vagabond Group Consulting and Coconut Grove-based Terra are also looking to take advantage of the program to redevelop a 6-acre industrial complex at 4800 Northwest 37th Avenue in Hialeah. Jain is structuring her funds on a project-specific basis, which means she is creating a fund to invest in each individual project rather than a blind pool to invest in multiple assets.

The federal program allows investors, businesses and developers to defer or forgo capital gains taxes if they build or invest in one of 8,700 designated Opportunity Zones throughout the country. Investors are able to forgo their capital gains if they put their money in an Opportunity Zone for at least ten years.

The program was intended to spur investment in distressed and low-income areas, but critics charge the program is simply a tax break for the wealthy and for mega projects such as the $4 billion SoLe Mia mixed-use project in North Miami.

Developers have until the end of the year to claim the biggest tax benefit from the program.

Jain said the Opportunity Zone program can make securing financing easier. “Banks are not always favorable toward office,” said Jain. “It is encouraging people to spend money where they may not have spent it before.”