A Miami Beach-based multifamily investor paid $11.7 million for a three-building apartment complex in Miami’s Overtown neighborhood, The Real Deal has learned.
Paul J. Neary’s purchase of the 92-unit Citywalk Apartments at 415 and 423 Northwest Ninth Street breaks down to about $127,717 per unit. The property, built in 1950, is located in an Opportunity Zone, an area designated as struggling economically, where investment is encouraged through tax breaks. Neary owns more than 100 apartments in Miami Beach, Coral Gables and Miami, records show.
Seller Armos Investments, through its Citywalk Apartments LLC, purchased the complex for $5.1 million in May 2016, records show. Led by managing directors Ken Arnold, Alex Moskovitz and Jon Arnold, Armos specializes in multifamily properties and renovating them to add value, according to the company’s website.
Joseph Phelps was part of the broker team with The Porosoff Group of Compass that marketed Citywalk Apartments. The listing price was $11.5 million or $125,000 per unit. In an email, Phelps said the site drew a lot of interest, despite low rents paid by tenants who have lived at Citywalk for more than 10 years.
“We had multiple full-price offers,” Phelps said. “We were able to get this buyer to increase their offer to $11.7 million with a non-refundable deposit.”
The three two-story buildings sit on 1.2 acres that also include a vacant slice of 1,250 square feet that could be developed into retail or commercial use. Neary could defer paying taxes on capital gains if he uses the money to invest in real estate or business projects through an Opportunity Zone fund.
Investors who put money into a fund by the end of this year will realize a 10 percent reduction on their taxable capital gains as long as the money is kept in an Opportunity Zone until 2026.
The apartment complex is near a planned Overtown mixed-use project led by Michael Swerdlow that will have an affordable housing rental complex for seniors with 578 units and a 50,000-square-foot Target. The development will rise on 3.44 acres at 249 Northwest Sixth Street.