European Beach House 721 Michigan Avenue, South Beach Flamingo Park Historic District

Transcription

1 European Beach House 721 Michigan Avenue, South Beach Flamingo Park Historic District OFFERING MEMORANDUM A Licensed Hotel Complex in the Heart of South Beach $2,499,000 Neal R. Deputy 690 Lincoln Road Miami Beach, FL Cell: (305) Fax: (305) nealdeputy@gmail.com

2 CONTENTS CONTENTS Existing Street Elevation Cover Contents Introduction Location & Environs Map City Zoning Verification Letter Ground Floor Plan Second Floor Plan Exterior Photographs Interior Photographs Weekly Rental Proforma Comparable Hotel Sales Hotel & Rooming House Codes About South Beach About Miami Notes to Bidders

3 INTRODUCTION INTRODUCTION Licensed Short Term Rental properties are exceedingly rare in the Art Deco Historic District of South Beach and The European Beach House provides extraordinary potential for a variety of enterprises. Built in 1921 in the Craftsman Bungalow style, this 7,000 square foot complex is comprised of eleven (11) Short Term Rental Units disposed around a central courtyard. The Main House at Street Front provides an entry porch, lobby, seven rental units (all with private baths) and upstairs common areas. The Courtyard Building to the rear of the site is contemporaneous and provides four units with private entries, private baths, and private gardens. See floor plans on following pages for room layouts and exterior features. The European Beach House was originally converted to transient rental use in the 1940s to serve the lodging needs of America s Armed Forces during WWII. Troops would train on the beaches by day and relax in the inviting tropical environs of this and other Rooming Houses by night. Known as Anker House in the 1940s, it became Helen s Apartments for much of the 60s and 70s and was ultimately converted to The European Guest House in the 1980 s. Beamed ceilings, bay windows, porches, decks, terraces, and lush tropical landscape define and characterize this important historic landmark. Stair to Courtyard Building B The Subject property has been in continuous operation since 1922 and is currently undergoing renovation and revitalization. The current owners are working in tandem with local professionals and the City of Miami Beach to ensure that all historic, building code, and licensing requirements are met. Asking prices for similar establishments in the Art Deco Historic District hit $650,000 per key (see Comparable Hotel Activity, page 14) making the price of the European Beach House at $227,000 per key a true value- a rarity in South Beach. Note that the Roominghouse designation for the subject property allows for remote management- free from the cumbersome demands of other short-term rental properties. Also, the ability to serve Food and Beverages to guests roundthe-clock adds significantly to potential income and is a more liberal use than is allowed for either Hotels or Bed & Breakfast Inns in the District. Finally, commercial signage to advertise the establishment is allowable on site (up to 20 square feet) and no additional parking or impact fees are required of the new owner. 03

4 LOCATION & ENVIRONS MAP Sailing the Bay Lincoln Road Mall Fun in the Sun Tennis? Miami Beach Convention Center Flamingo Park Art Deco Historic District South Beach European Beach House Collins Avenue Shopping District Alton Road Arts District 5 th Street to Miami World Famous Ocean Drive 04

5 ZONING VERIFICATION LETTER ZONING VERIFICATION LETTER 05

6 GROUND FLOOR PLAN GROUND FLOOR PLAN Space for Private Outdoor Showers and Gardens Private Entry and Garden for Unit B-2 B-2 B-1 Stair to Units B-3, B-4, and Baloneys above Courtyard Overlook above Generous Courtyard with ample room for a Swimming Pool Stair to Common Areas above B2 A-4 Space for Private Outdoor Showers and Gardens A-2 A-3 All Units are provided with Private Baths A-1 LOBBY Elegant Entry with Porch and Lobby Ample Lawn Area for Landscape or other Features Existing Curb cut with Drop-Off and Delivery Space ENTRY Commercial Signage allowable By-Right 06 06

7 SECOND FLOOR PLAN SECOND FLOOR PLAN Private Porch for Unit B-4 Shared Porch Entry for Units B-3 and B-4 B-4 B-3 Stair to Units B-3, B-4, and Balcony BALCONY Courtyard Overlook Courtyard Below Private Deck for Unit A-7 overlooking Courtyard DECK Common Area Lounge on Second Floor DEN A-7 Most Units are Corner Located. All Units have Private Baths A-5 A

8 EXTERIOR PHOTOGRAPHS European Beach House from the Street Stair Leading to Courtyard Building B at Rear of Site Courtyard between Buildings A & B

9 EXTERIOR PHOTOGRAPHS Courtyard Building and Stair to Balcony above Apartment Building at Rear of Property View to Street from Second Floor Balcony View of Main Building and Courtyard from Building B Balcony Bathroom #3 Undergoing Repairs 09

10 EXTERIOR PHOTOGRAPHS Courtyard view from Covered Terrace outside Unit B1 Private Gardens at Rear of Units B1 & B2 View of Courtyard Building B and Courtyard 10

11 INTERIOR HOTOGRAPHS Enclosed Entry Porch (Formerly Open) Beamed Ceiling and Wood Paneled Doors in Entry Lobby Entry Lobby Leading to Central Stair and Adjoining Rooms 11

12 INTERIOR PHOTOGRAPHS Second Floor Lobby and Stair Landing Typical Room with A/C, Ceiling Fan, Private Bath, and Tiled Floors Entire Facility is Protected by Commercial Quality Fire Alarm Equipment 12

13 WEEKLY RENTAL PROFORMA WEEKLY RENTAL PROFORMA European Beach House Short Term (Weekly) Rental Proforma Income: Year 65% Occupancy Expenses: Typ. Annual UNIT # TYPE: WEEKLY ANNUAL ITEM: EXPENSE: 1 Single $999 $51,948 Property Taxes $38,000 2 Single $999 $51,948 Sales & Resort Tax Added 3 Single $999 $51,948 Insurance $12,000 4 Single $999 $51,948 Water/Sewer $5,400 5 Single $999 $51,948 Electric $3,600 6 Single $999 $51,948 Garbage $2,400 7 Single $999 $51,948 Landscape $2,400 Pest Control $1,200 8 Double $1,299 $67,548 Licenses $500 9 Double $1,299 $67,548 Fire Inspection $95 10 Double $1,299 $67,548 Property Mgmt $24, Double $1,299 $67,548 Maint. & Repairs $12,000 Advertising $18,000 Housekeeping $20,800 Unknowns (10%) $16,000 Total GPI: Weekly= $12,189 Annual= $633,828 Total Expenses= $156,395 Adjustments to GPI: Year 1 65% Occ= $382,359 Peak Week Premium 15% $95,074 Year 2 70% Occ= $414,050 Ancillary Services 5% $31,691 Year 3 75% Occ= $445,742 Occupancy Year #1 65% $411,988 Year 4 80% Occ= $477,433 Year 5 85% Occ= $509,124 Adjusted: Monthly= $44,896 Annual= $538,754 Cape Year 1 = 12.75% Cap Yr 1 Cap Yr 2 Cap Yr 3 Cap Yr 4 Cap Yr 5 Cap Rates reflect a total 12.75% 13.80% 14.86% 15.91% 18.18% investment of $3,000,000 13

14 RECENT COMPARABLE HOTEL SALES COMPARABLE HOTEL ACTIVITY Address Month Sale Price BLD'G SF Cost/ SF Units Cost/Unit Name 347 Washington ACTIVE $13,900,000 11,140 $1, $579,167 St. Augustine 1415 Collins ACTIVE $8,500,000 7,980 $1, $500,000 Villa Paradiso 1018 Jefferson ACTIVE $6,500,000 3,956 $1, $650,000 B&B Inn 354 Washington ACTIVE $6,800,000 5,916 $1, $523,077 Villa Italia th St ACTIVE $4,950,000 3,375 $1, $412,500 Boutique Washington SOLD $28,500,000 32,662 $ $380,000 Clinton Hotel 7450 Ocean Ter SOLD $29,250,000 53,102 $ $314,516 Days Inn 1775 James SOLD $12,900,000 15,557 $ $280,435 Hotel Collins SOLD $11,000,000 21,832 $ $366,667 Eva Hotel 1120 Collins SOLD $15,475,000 30,954 $ $286,574 Nash Hotel TOTAL: $137,775, , AVERAGE: $1,166 $368,

15 HOTEL & ROOMING HOUSE CODE HOTEL & ROOMING HOUSE CODE 15

16 ABOUT SOUTH BEACH ABOUT SOUTH BEACH Miami Beach is a coastal resort city located in Miami-Dade County, Florida. Incorporated on March 26, 1915, it is located on a series of natural and man-made barrier islands between the Atlantic Ocean and Biscayne Bay, the latter separates the Beach from Miami city proper. The historic neighborhood of South Beach, comprising the southern- most 2.5 square miles of Miami Beach, along with Downtown Miami and the port, collectively form the commercial center of South Florida. As of the 2010 census, the city had a total population of 87,779. Miami Beach has remained one of America's pre-eminent beach resorts for the past 100 years. In 1979, Miami Beach's Art Deco Historic District was listed on the National Register of Historic Places. The Art Deco District is the largest collection of Art Deco architecture in the world comprising hotels, apartments and other structures erected between 1923 and Mediterranean, Streamline Moderne, and Art Deco are all represented in the District. South Beach is bounded by the Atlantic Ocean on the East, Lenox Court on the West, 6th Street on the South and Dade Boulevard along the Collins Canal to the North. The movement to preserve the Art Deco District's architectural heritage was led by former interior designer Barbara Capitman, who now has a street in the District named in her honor. Miami Beach has a tropical climate with hot humid summers and warm dry winters. Other than the Florida Keys, Miami Beach has the warmest winter weather in the United States (mainland). The warm and sunny weather in Miami Beach and South Florida attracts millions of travelers from around the world from November through April. Sea surface temperatures range from 75 F in winter to 86 F in the summer/fall months. Miami Beach has the warmest ocean surf in the United States annually. Median Resident age in 33139: Median Resident Age in FL: 38.9 yrs 40.5 yrs Average household size in 33139: 1.7p Average household size in FL: 2.6p Average AGI in 2010 in $89,607 Average AGI in 2010 in FL $50,523 Average Wages filed in 33139: $52,304 Average Wages filed in FL: $39, population in 2010: 32, population 2000: 38,441 Houses and Condos: 36,412 Renter-occupied Apts: 16,452 % of Renters in 33139: 69% % of Renters in FL: 31% March 2012 COL index : Well above U.S. average: Land area in square miles: 2.7 Water area in square miles: 3.3 RE property taxes for housing units in 2010 in 33139: (1.2%) $4,175 Florida: ( 1.0%) $1,882 Median RE property taxes paid for housing with mortgages in 2010: 5 (1.4%) $4,665 Median RE property taxes paid for housing with no mortgage in 2010: 5 5 (1.1%) $3,466 16

17 ABOUT MIAMI ABOUT MIAMI ABOUT MIAMI Miami is a city located on the Atlantic coast in southeastern Florida and the county seat of Miami-Dade County. The 42nd largest city proper in the United States, with a population of 408,568, it is the principal, central, and most populous city of the Miami metropolitan area, and the most populous metropolis in the Southeastern United States. According to the U.S. Census Bureau, Miami's metro area is the seventh most populous and fourth-largest urban area in the United States, with a population of around 5.5 million. Miami is a major center and a leader in finance, commerce, culture, media, entertainment, the arts, and international trade. In 2010, Miami was classified as a Alpha- World City in the World Cities Study Group s inventory. In 2010, Miami ranked seventh in the United States in terms of finance, commerce, culture, entertainment, fashion, education, and other sectors. It ranked thirty-third among global cities. In 2008, Forbes magazine ranked Miami "America's Cleanest City", for its year-round good air quality, vast green spaces, clean drinking water, clean streets and city-wide recycling programs. According to a 2009 UBS study of 73 world cities, Miami was ranked as the richest city in the United States, and the world's fifth-richest city in terms of purchasing power. Miami is nicknamed the "Capital of Latin America", is the second-largest U.S. city (after El Paso, Texas) with a Spanish-speaking majority, and the largest city with a Cuban-American plurality. Downtown Miami and South Florida are home to the largest concentration of international banks in the United States, and is home to many large companies both nationally and internationally. The Civic Center is a major center for hospitals, research institutes, medical centers, and biotechnology industries. For more than two decades, the Port of Miami, known as the "Cruise Capital of the World," has been the number one cruise passenger port in the world, accommodating some of the world's largest cruise ships and operations, and is currently the busiest in both passenger traffic and cruise lines Miami has a tropical monsoon climate with hot and humid summers and short, warm winters, with a marked drier season in the winter. Its sea-level elevation, coastal location, position just above the Tropic of Cancer, and proximity to the Gulf Stream shapes its climate. The wet season begins sometime in May, ending in mid-october. During this period, temperatures are in the mid 80s to low 70s. Much of the year's 55.9 inches (1,420 mm) of rainfall occurs during this period. 17

18 NOTES TO BIDDERS NOTES TO BIDDERS Please do not explore the premises without the Listing Agent. Viewings of the site and interiors will be promptly arranged following receipt of an acceptable Letter of Intent. This brochure is intended solely for informational purposes to assist in determining if one wishes to proceed with further due diligence investigation of the property. The information included herein has been obtained from sources deemed to be reliable but no representations, guarantees, or warranties with respect to this information are being made. Additionally, this information is subject to change at any time without notice to recipients. Risks are involved in any real estate purchase. It is the investor s responsibility to independently verify any data relied upon for an investment using qualified legal, financial, and operations advisors. Projections, opinions, assumptions, or estimates used in this memorandum are illustrative examples only. Prior to investing in real estate, investors should also carefully consider possible tax consequences and legal requirements. In conclusion, the subject property offers a rare and singular opportunity to own and operate a highly desirable short term rental facility in the heart of South Beach- America s playground and the world s entertainment mecca. Furthermore, additional upside can be anticipated in the development of on-site amenities, food and beverage operations, and the full range of services available in close proximity. Real Estate deals in South Beach tend to fall into very low cap rate long term equity plays. Further, available inventory is virtually nonexistent in the Art Deco District and most deals currently being presented produce very low returns. 721 Michigan Avenue provides a solid investment for the discerning investor, developer, or operator with tremendous upside potential and long term value. 18