Multifamily complex in Overtown Opportunity Zone hits market for nearly $12M
92-unit Citywalk Apartments were built in 1950
An apartment complex in an Opportunity Zone in Miami’s Overtown neighborhood hit the market with an asking price of $11.5 million.
The owner of Citywalk Apartments, tied to Miami-based Armos Investments, listed the property at 415 Southwest Ninth Street after renovating some of the 92 units. The apartments were built in 1950, records show.
Arthur Porosoff, David Cohen and Joseph Phelps of The Porosoff Group, which is part of Compass, are marketing the multifamily complex. The listing price equates to $125,000 per unit.
Armos Investments, through its Citywalk Apartments LLC, bought the property in May 2016 for $5.1 million, a deed shows. Armos, led by managing directors Ken Arnold, Alex Moskovitz and Jon Arnold, focuses on multifamily properties to which it can add value through renovations, according to its website.
Citywalk Apartments includes three two-story buildings on 1.2 acres. The property includes a 1,250-square-foot vacant area that could be developed with retail or another commercial use; a 90-square-foot management office; and an 800-square-foot laundry room that originally was an apartment, according to an offering memorandum. All units are 478-square-foot one-bedrooms.
The complex is in an Opportunity Zone, areas designated as struggling economically, where investment is encouraged through tax breaks. The Tax Cuts and Jobs Act of 2017 allows investors to defer paying taxes on capital gains as long as they put the money into a Qualified Opportunity Zone Fund that in turn invests in real estate or business projects in Opportunity Zones. Investors who put their money into a fund by the end of this year will get a 10 percent deduction of their taxable capital gains as long as they keep the money in an Opportunity Zone until 2026.
According to the property’s offering memorandum, of 18 currently vacant units, eight have been remodeled, four have been partially remodeled and two are in fair condition and still can be rented out. The remaining four need to be upgraded.
The mixture of renovated and non-renovated units accounts for a wide variation in monthly rents, ranging from $650 to the $900s. Once an apartment is fully upgraded, it could rent for as much as $1,150 a month, though few apartments currently are at this rate, according to the memorandum.
Nearby, some developers are targeting Overtown for development.
The Swerdlow Group, led by Michael Swerdlow, and partners SJM and Alben Duffie are developing a 578-unit affordable housing rental complex for seniors, with a 50,000-square-foot Target, on 3.44 acres at 249 Northwest Sixth Street. They scored a $25 million project loan last September.
Among other investors, Michael Simkins last year bought 13 lots through an affiliate for $5.2 million. And Housing Trust Group wants to build a 1,300-unit affordable housing project on 10.4 acres leased from Miami-Dade County.