1550 Meridian Avenue $2,199,000 OFFERING MEMORANDUM. Flamingo Park Historic District. South Beach

Transcription

1 1550 Meridian Avenue Flamingo Park Historic District South Beach OFFERING MEMORANDUM Neal R. Deputy A Premier Multifamily Asset in the Heart of South Beach $2,199, Lincoln Road Miami Beach, FL Cell: (305) nealdeputy@gmail.com

2 CONTENTS CONTENTS Cover Contents Introduction Location & Environs Map Existing Floor Plans Exterior Photographs Interior Photographs Existing Rental Proforma Market Rate Proforma Converted Proforma Comparable Recent Sales Expansion Plans About South Beach About Miami Notes to Bidders

3 INTRODUCTION INTRODUCTION 1550 Meridian Avenue is an eight-unit multifamily asset in the heart of South Beach s most desirable district. Built in 1937 of concrete block and stucco it survives in excellent condition and remains fully occupied. All the units are generously scaled with private bedrooms (no Studio apartments). The building comprises 5231 leasable square feet on a 7500-square foot lot. Its proximity to Lincoln Road Mall, Flamingo Park, the Beach, New Convention Center, the renaissance of Alton Road, and the Entertainment District make it an attractive place to live for business owners and young professionals. Units feature wood floors, newer kitchens and baths, and many original features retained. Unique Upside; -Current zoning of the site is RM-1 allowing an FAR of The 7,500- square foot site thus translates into a total buildable area of 9,375 square feet. Subtracting the existing 5,231 square feet leaves a remaining buildable are of 4,144 square feet. Please see expansion plans on pages illustrating an additional six units allowable at the rear of the site. -Current rents are approximately 20% below market. With an average per square foot cost of $3.35 for all of South Beach for 2016 (Miami-Dade Housing Report) the current Cap Rate (see page 11) could be substantially increased. Typical Dining Area -Design work is complete and permits are in progress to install Central A/C in all units, provide new Impact Windows and Doors, tankless water heaters in all units, new landscape, fencing, plaster and paint as well as many common area upgrades. -Half of the One-bedroom units are approximately 750 square feet and can easily be converted to Two-bedroom units significantly increasing rents and desirability. Much of the multifamily stock in this area has been converted to condominiums making two-bedroom rental units increasingly difficult to find and commanding a premium price. Please see converted proforma on page 13. -Finally, the explosion of construction on Miami Beach over the last few years has been aimed almost exclusively at the hospitality and retail sectors with little new housing planned or even contemplated. A renovated residence at 1550 Meridian will continue to draw exceptional tenants at exceptional prices. 03

4 LOCATION & ENVIRONS MAP Sailing the Bay Lincoln Road Mall Fun in the Sun Bayshore Municipal Golf Miami Beach Convention Center South Beach Flamingo Park Collins Ave Entertainment Zone Alton Road Arts District 1550 Meridian Avenue World Famous Ocean Drive 04

5 ZONING VERIFICATION EXISTING LETTER GROUND FLOOR PLAN EXISTING GROUND FLOOR PLAN 05 05

6 EXISTING SECOND FLOOR PLAN EXISTING SECOND FLOOR PLAN B-3 06

7 EXTERIOR PHOTOGRAPHS Entryway to Interior Stair Halls Apartment Building at Rear of Property Lovely Art-Deco Styling and Ornamentation Pool in Rear Yard for Private Use of Tenants Bathroom #3 Undergoing Repairs 07

8 EXTERIOR PHOTOGRAPHS Permits in Progress to Replace Wall A/C Units with Central Systems Permits in Progress to Replace All Existing Jalousie Doors with Hurricane Impact Doors. Permits in Progress to Replace All Existing Windows with Hurricane Impact Windows. 08

9 INTERIOR HOTOGRAPHS Lovely Kitchens with Glass Cabinets and Granite Counters Large Living Rooms with Sleeping Nook Beyond Typical Dining Room with Arched Openings and Beautiful Wood Floors 09

10 INTERIOR PHOTOGRAPHS Original Decorative Fireplaces Survive in Beautiful Condition (Gas Lines Added in Some Locations) Corner Bedrooms Bathed in Natural Light Beautiful Wood Floors and Moldings Throughout These Well Cared-for Units. 10

11 EXISTING RENTAL PROFORMA EXISTING RENTAL PROFORMA Monthly Income: Annual Expenses: APT # TYPE: RENT PROPERTY TAXES $19, Bedroom $1,445 INSURANCE $3, Bedroom $1,300 COMMISSIONS $2, Bedroom $1,395 WATER/SEWER $7, Bedroom $1,545 ELECTRIC $1, Bedroom $1,350 TECO GAS $1, Bedroom $1,250 WASTE MANAGEMENT $2, Bedroom $1,250 FIRE INSPECTION $ Bedroom $1,350 LICENSES & TAXES $883 POOL $1,311 LAUNDRY $80 LAUNDRY RENTAL $616 MGMT & MAINT $3,600 REPAIRS $6,313 PEST CONTROL $1,440 1% $1,316 Total: $53,071 Total: $10,965 Total Expenses: Monthly $4,423 Total Scheduled Income: Annually $53,071 Monthly $10,965 Annually $131,580 NOI: Monthly $6,542 CAP RATE = 3.6% Annually $78,509 The Cap Rate represented above is for a fully stabilized building, fully tenanted, with all expenses included. Improvements to Cap Rate can be achieved through a variety of means as represented on the following pages 12 and

12 MARKET RATE RENTAL PROFORMA MARKET RATE RENTAL PROFORMA Monthly Income: Annual Expenses: 13 APT # TYPE: RENT PROPERTY TAXES $19, Bedroom $1,850 INSURANCE $3, Bedroom $1,650 COMMISSIONS $2, Bedroom $1,650 WATER/SEWER $7, Bedroom $1,850 ELECTRIC $1, Bedroom $1,850 TECO GAS $1, Bedroom $1,650 WASTE MANAGEMENT $2, Bedroom $1,650 FIRE INSPECTION $ Bedroom $1,850 LICENSES & TAXES $883 POOL $1,311 LAUNDRY $100 LAUNDRY RENTAL $616 MGMT & MAINT $3,600 REPAIRS $6,313 PEST CONTROL $1,440 1% $1,692 Total: $53,447 Total: $14,100 Total Expenses: Monthly $4,454 Total Income: Annually $53,447 Monthly $14,100 Annually $169,200 NOI: Monthly $9,646 CAP RATE = 5.3% Annually $115,753 A conservative rental rate of $2.50 per square foot is used for the larger 750 square foot units. Likewise, the smaller 550 square foot units are priced at $3.00 per square foot. In this scenario the Cap Rate increases a significant 32% 12

13 CONVERTED MARKET RATE PROFORMA CONVERTED MARKET RATE PROFORMA Monthly Income: Annual Expenses: APT # TYPE: RENT PROPERTY TAXES $19, Bedroom $2,250 INSURANCE $3, Bedroom $1,650 COMMISSIONS $2, Bedroom $1,650 WATER/SEWER $7, Bedroom $2,250 ELECTRIC $1, Bedroom $2,250 TECO GAS $1, Bedroom $1,650 WASTE MANAGEMENT $2, Bedroom $1,650 FIRE INSPECTION $ Bedroom $2,250 LICENSES & TAXES $883 POOL $1,311 LAUNDRY $100 LAUNDRY RENTAL $616 MGMT & MAINT $3,600 REPAIRS $6,313 PEST CONTROL $1,440 1% $1,884 CAPEX $8,000 Total: $61,639 Total: $15,700 Total Expenses: Monthly $5,137 Total Income: Annually $61,639 Monthly $15,700 Annually $188,400 NOI: Monthly $10,563 CAP RATE = 5.8% Annually $126,761 There is significant value-add by converting the larger 750 square foot units from One-bedroom units to Two-bedroom units. Priced conservatively at $3.00 per square foot the Cap Rate increases another 10% even including Capex of $8,

14 RECENT COMPARABLE SALES RECENT COMPARABLE SALES Address Month Sale Price BLD'G SF Cost/ SF Units Cost/Unit Assesment AVR 1101 Euclid MAR $3,200,000 6,666 $ $200,000 $1,046, Meridian JUN $3,050,000 7,417 $ $217,857 $1,276, Michigan JUN $1,875,000 4,031 $ $187,500 $1,300, Euclid JUL $2,280,000 7,324 $ $190,000 $1,191, th JUL $3,450,000 6,406 $ $215,625 $1,507, Michigan AUG $1,565,000 5,378 $291 8 $195,625 $820, Jefferson SEP $3,800,000 8,185 $ $190,000 $1,733, Meridian JAN $2,660,000 5,969 $ $221,667 $1,408, Meridian JAN $3,500,000 7,013 $ $205,882 $1,633, Meridian FEB $2,823,600 7,166 $ $235,300 $1,430, Euclid FEB $2,908,600 7,342 $ $207,757 $1,460, Meridian JAN $2,660,000 5,969 $ $221,667 $1,408, Meridian JAN $3,500,000 7,013 $ $205,882 $1,633, Meridian FEB $5,850,000 15,723 $ $201,724 $3,167, TOTAL: $43,122, , AVERAGE: $430 $206, Note that few 8 unit buildings transacted in the last 12 months. These buildings are rarities and most have been expanded or additional buildings constructed in rear yards. With land values prepaid the addition of more units can be quite lucrative. 14

15 EXPANSION PLANS- FIRST FLOOR EXPANSION PLANS- FIRST FLOOR 15

16 EXPANSION PLANS- SECOND FLOOR EXPANSION PLANS- SECOND FLOOR 16

17 EXPANSION PLANS- THIRD FLOOR EXPANSION PLANS- THIRD FLOOR 17

18 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 18

19 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. 19

20 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 asset in the heart of South Beach- America s playground and the world s entertainment mecca. Furthermore, additional upside can be anticipated through any number of development schemes. 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 Meridian Avenue provides a solid investment for the discerning investor, developer, or operator with tremendous upside potential and long-term value. 20