A partnership of four investors scooped up an aging North Miami apartment building, with plans to fix it and raise rents.
Giovanni Bertolotti, Abiel Ballesteros, Rene Sanchez and Michael Mallory bought the Ocean King Apartments at 14500 Northeast Sixth Avenue from an affiliate of Miami-based Ezkanda Group for $13 million, Bertolotti told The Real Deal. Ballesteros and Sanchez are co-founders of multifamily investment firm SAR Apartment Capital. Bertolotti’s firm is G-Sar.
The buyers took out a $12.8 million loan from Hollywood-based Sheridan Capital.
Ocean King consists of a four-story building with 82 apartments — including 55 one-bedroom units and 27 two-bedroom units — and a small commercial building. Completed in 1970, the property spans 2 acres. The commercial space is fully leased, and the apartments are roughly 80 percent leased, Bertolotti said.
The property last traded in 2018, also for $13 million, records show. It’s unusual that a multifamily asset did not increase in value, especially in the last two years when the market boomed.
According to Bertolotti, Miami-based Ezkanda Group was looking to offload Ocean King after failing to obtain a required recertification for the property. That lowered the asset’s value, making it “semi-distressed,” he said.
Ezkanda declined comment.
Miami-Dade County previously mandated 40-year recertifications of buildings, but bumped up the requirement to 30 years in response to the deadly Surfside condominium collapse of 2021. After the tragedy, which killed 98 people, Florida lawmakers also imposed a 30-year recertification requirement statewide. Buildings have to obtain a recertification every 10 years thereafter.
The Ocean King buyers have started necessary roof repairs, and next will start fixing balcony railings — all work that an inspection report deemed necessary for the property to obtain a recertification, Bertolotti said. Roughly $3 million of the FM Capital loan is for capital improvements.
Once it’s spruced up, Ocean King rents will increase.
“There is a lot of upside. Units are renting at $1,200 to $1,300” a month, Bertolotti said. “We can easily bump them up to $1,800.”
The buyers previously seized on another apartment building in September that had a low value due to structural issues. They paid $6.5 million for the five-story Coasterra apartment building at 3800 Northeast 168th Street in North Miami Beach’s Eastern Shores, records show. The purchase came five months after city officials declared the 60-unit building unsafe and evacuated the property.
“They thought they had to demolish the building. We went there with our engineers and we said, ‘It doesn’t need to be demolished.’ So we ended up buying it,” Bertolotti said.
The partners plan to complete structural repairs at Coasterra, which remains vacant.
Bertolotti, Ballesteros, Sanchez and Mallory’s Ocean King purchase comes amid a dry spell for South Florida multifamily investment sales. While apartment buildings were among the strongest asset classes in the past two years, deals nosedived in recent months because of high interest rates and expensive financing.
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