Venice and Florence at Crystal Lakes
242 Units / Homestead, FL
SALES PRICE:
$39,500,000
SALES TYPE:
MULTIFAMILY / BULK CONDO
MSP Group was hired by the original developer, on an exclusive basis, to market and sell the remaining inventory of their 360-Unit community known as Venice and Florence at Crystal Lakes. The Miami-based developer had developed the property as condos and town homes for-sale beginning in 2006, not long before the Great Financial Crisis (GFC) struck in 2008. Prior to the GFC, the developer was able to complete two phases of condominiums; one phase contained 88 units, and the second phase had 112 units for a total of 200 units. Prior to the GFC meltdown, the developer sold 118 of the units, but once sales dried up, construction halted and they pivoted to renting the units to maintain the property.
Eventually, the markets began to heal and construction resumed. By 2011, the developer completed the final phase of 160 multifamily units (formerly intended to be condos for sale). While the for-sale market still languished, rentals proved to be strong, allowing the developer to mitigate damages with cash flow. Then came the time for them to exit the project. The disposition would be complicated. Although it was a cash flowing asset, it was a fractured community and there were two homeowner associations as well as a master association, resulting in four sets of financials that had to be understood and conveyed to buyers. MSP Group was retained as exclusive agent to sell the 67% interest in the community (242 of the 360 Units). The owner had confidence in MSP Group based on our qualifications and experience in dealing with bulk condo sales.
Our initial marketing efforts generated 8 competitive offers that all coalesced in February of 2020, which of course was immediately before the COVID-19 global pandemic that began in March of 2020. Several of the bidders pulled their offers and we had to regroup. Our team powered through, reignited our marketing efforts and generated another round of bidding, ultimately selling the asset for $39,500,000 or 98.7% of our pre-COVID Broker Opinion of Value range.
Bay Harbor Towers
30 Units / Bay Harbor Islands, FL
SALES PRICE:
$32,000,000
SALES TYPE:
Multifamily / Bulk Condo / DEVELOPMENT SITE
Our team was approached by some forward-thinking unit owners within a 30-unit condominium named the Harbor Condominium. The property was located in the exclusive enclave of Bay Harbor Islands, and was situated on a wide, bay-front lot spanning 1.03 acres. Like many properties of its kind, Habor was facing skyrocketing insurance rates and heavy assessments brought on by new legislation requiring condominiums to meet rigid building standards and to fully fund association reserves. In light of these trends, the board formed an exploratory sales committee which was responsible for locating an expert brokerage team that could advise them both on the value of the site and execute the marketing and sale of their shared asset.
We presented our valuation of the site that was informed by our expert analysis and recommendations to the owners were grounded in our deep experience in navigating complicated transactions. Based on our market research, zoning analysis and development proforma, we suggested a whisper number of $30,000,000 for the site. Our team was approved by the Sales Committee and the Board of Directors to handle the sale. Given that some owners had multiple units, there were 23 owners of the 30 units. Our team contacted each owner individually, explained the process, and ultimately earned the trust of every owner. After months of persistent efforts, we secured the critical mass of participation from the community and commenced the marketing of the site.
We generated 5 competing offers from qualified developers and managed the best-and-final process that resulted in 100% of the bidders to above our whisper price. The deal was awarded to a local developer who closed on time and at the full contract price of $32,000,000 for the 1-acre site; translating to an average price of $1,066,667 per unit. It is important to note that this price was 39% higher than the highest price quoted by all of our competitors. Also noteworthy is that this was a record setting price for the sale of land in Bay Harbor Islands, a record which proudly stands today!
Marshall, CC Vista and View Apartments
134 Units /Miami and Hialeah, FL
SALES PRICE:
$21,000,000
SALES TYPE:
Multifamily Portfolio / Low Income Housing Tax Credit (LIHTC)
This portfolio assignment was the second of its kind for the same client. This Miami-based investor retained MSP Group on an exclusive basis to market and sell their 134-unit multifamily portfolio. The portfolio was comprised of two market rate assets and one Low Income Housing Tax Credit (LIHTC) asset. The two market rate assets, Marshall Apartments and CC Vista Apartments, were separated by a few miles but were both located in the City of Hialeah, one of the strongest submarkets in Miami. The third asset, View Apartments, was located in unincorporated Miami-Dade County, was situated on 3.54 acres of land with lake views and was subject to long-term income and rental restrictions.
View Apartments had been developed in 1992 under the LIHTC program, which provides Federal subsidies via tax credits to developers to incentivize the construction of affordable housing. This program remains in place today and is a key driver in adding to the availability of workforce rental housing nationwide. The rental requirements for View Apartments are outlined in the Land Use Restriction Agreement (LURA) and the Rental Regulatory Agreement (RRA). These documents require that 20% of the project be rented to households earning no more than 40% of the Area Median Income (AMI) and the remaining 80% be rented to households earning a maximum of 60% of the AMI. These restrictions will remain in place until the year 2060, which is effectively a lifetime from when we sold it.
The affordable housing restrictions encumbering the View Apartments dramatically reduce the buyer pool of interested buyers, which posed a significant challenge to the MSP Group team. However, this was not the most challenging aspect of our assignment. The biggest hurdle our team faced was that our seller insisted that all three properties not only be sold and closed at the same time, but that they also be contingent upon one another. We explained to our client (again) that this is not the optimal way to sell property, but they had confidence in us because a few years prior, we executed for this same client a similarly challenging four-property portfolio with the same simultaneous and contingent upon one another requirement!
Ultimately, our far-reaching marketing campaign resulted in selling the entire portfolio to three unrelated investors. MSP Group’s tenacity and experience allowed us to shepherd the deal to successful, simultaneous closings with three different buyers who closed with three separate lenders. To claim it was a stress-free transaction would be dishonest, but to say this success story is a product of our deep experience, tenacity and our commitment to long-term client relationships would be as true a statement as can be made. Three of the four parties involved were repeat MSP Group clients!
Riverwalk II Apartments
112 Units / Homestead, FL
SALES PRICE:
$12,000,000
SALES TYPE:
Multifamily / Low Income Housing Tax Credit (LIHTC)
MSP Group was retained on an exclusive basis to market and sell the Riverwalk II Apartments by ownership that was based in Aventura, FL. The property, a 112-unit garden-style apartment complex, on 8.2 acres of land, is located in Homestead, Florida. The property was originally developed by the Related Group in 1994 as a Low Income Housing Tax Credit (LIHTC) project, which utilized Federal subsidies via tax credits. The LIHTC program remains in place today and is a key driver in adding to the availability of affordable rental housing nationwide.
Developers are granted these funds via a competitive process and once awarded, they must agree to long-term restrictions as to who can be a tenant at the property and what rents can be charged. In the case of Riverwalk II Apartments, the property was bound to a Land Use Restriction Agreement (LURA) and a Rental Regulatory Agreement (RRA) that required all tenants at the property to meet certain income levels and the landlord to keep rents below certain thresholds based on income levels and number of members per household.
More specifically, the property can only rent to tenants with a household income of no more than 60% of the Area Median Income (AMI), and no more than rents set by HUD each year per income level. Under the RRA, the restrictions were to be in place for a period of 53 years and 8 months from inception. At the time of the sale, there were more than 40 years of restrictions remaining.
Through MSP Group’s marketing program, numerous property tours and 5 qualified written offers were generated, all within the range of value we provided in our Broker Opinion of Value. With our counsel, our client selected the ultimate buyer who closed the deal at 98% of our top valuation and within 96% of our asking price!
Sunset House and Grillaire Apartments
51 Units / South Miami, FL
SALES PRICE:
$11,900,000
SALES TYPE:
Multifamily
MSP Group was grateful for the opportunity to exclusively represent the owners of two multifamily properties located in the City of South Miami. We were particularly proud to assist these owners in exiting assets that they had owned for 30 and 37 years respectively. Sunset House Apartments, a 30-unit, 2-story garden style community that was built in 1962, and the Grillaire Apartments, which was a 3-story, elevator served community also built in 1962. The Sellers were partners in a successful construction company for over 40-years, and they had acquired the properties with profits from that enterprise. After decades in business and as they approached retirement, they decided it was time to sell.
While they had maintained the assets, other than recent roof replacements, very few improvements had been made over the years. The unit interiors were tired, which limited the rent that the owners could charge, but with no debt on the property, the owners still enjoyed some cash flow. Our market studies determined that the in-place rents were between 80-100% below market. This massive rental upside and uniqueness of their location were the main reasons for our aggressive valuation. While the stellar location helped support our high asking prices, the extraordinarily low income meant the properties were not conventionally financeable.
We generated strong interest from both local and out-of-area buyers. Some buyers were interested in both properties; some were interested in just one or the other. Through our management of the competitive process the best result came by way of two separate buyers, one local and one from New York. The local buyer was in a 1031 Tax Deferred Exchange, and the New Yorker had recently sold a portion of his business and was looking to take a long-term position in Miami multifamily. The Grillaire deal was all-cash and for the Sunset House deal, we negotiated a mutually beneficial structure that included short-term seller financing. We were able to push the value higher on the Sunset House property by negotiating a waiver of windstorm insurance in exchange for the buyer installing hurricane impact windows within six months of closing. Ultimately, we closed both deals within nine days of one another, at 95% of our asking price, and for 99% of the top price in our Broker Opinion of Value range.
The Intermex Building
32,218 SF / Miami, FL
SALES PRICE:
$9,200,000
SALES TYPE:
OFFICE / DEVELOPMENT SITE
The history of the Intermex Building is one that highlights not only MSP Group’s prowess in commercial real estate sales, but also our commitment to long-term client relationships. What led to MSP’s involvement with this particular office building began with an assignment to list and sell a 112-unit multifamily property in Miami Gardens for a Chicago-based investor. After helping our client realize a 2.42 gross multiple on the sale of the apartments, MSP Group guided him through the entire 1031 Tax Deferred Exchange process. We sourced and coordinated with the 1031 intermediary as well as located his up-leg property, which of course was the Intermex building.
The building was a 4-story office building with 32,218 square feet, situated on 0.95 acres of high density-zoned land. The Intermex property proved to be a suitable replacement for the investor based on his investment objectives of improving asset quality, boosting cash flow, and reducing management responsibilities. The building was 100% occupied with a long-term, triple net lease corporately guaranteed by a successful, multinational tenant; all compelling reasons to buy, but what sealed the deal was the exceptional location. The asset had excellent exposure on US-1, great access to highways and the Metrorail, and was across the street from Pinecrest, one of the most affluent submarkets in all of Miami. With all the boxes checked, we helped our client execute the purchase and successfully complete his 1031 Tax Deferred Exchange.
10 years later, the tenant’s lease had expired, and they had vacated the building. But as the ultimate proof that we don’t disappear the day after closing, and because we remained in contact with our client over the years, so naturally he asked us to evaluate the property and review his options. Being 100% vacant, we valued the asset as a prime owner-user opportunity, with significant future redevelopment potential because the zoning allowed up to 23-stories to be built. Based on our valuation and review of his goals and objectives, rather than leasing the building up, he decided to sell the property. He listed the property with MSP Group, and our marketing program generated four competing offers. By expertly managing the sale process, we sold and closed the deal at 100% of our asking price, which was also the very top of our Broker Opinion of Value range. The Intermex building was sold to a local developer who originally had planned to occupy a portion of the building with his firm but later decided to move forward with plans to re-develop the site entirely.