SARTRE LLC has the opportunity to participate in the conclusion of the development of The Filling Station Lofts, an unfinished residential project located on a 0.57-acre site at 1657 North Miami Avenue in Miami, Florida. The property is positioned in and next to Miami’s most exciting, up and coming neighborhoods, representing the city’s new urban core.
The project is partially completed, approximately 70%. The building is ten stories high at 175 feet. There will be 81 available units that range from 847 to 1,596 square feet and can be combined to accomplish larger floor plans for future sales purposes. Every loft has 18′ high ceilings, which allows construction of true mezzanines. Plans include extensive amenities such as a pool, hot tub, sundeck, indoor basketball court, fitness area, and spa. Additionally, there will be a retail and commercial component in the ground floor facing north to NE 17th Street. The 12,000 square feet of retail and commercial space will bring additional revenues and increased traffic to the area.
During the peak of the real estate market similar spaces were trading at prices between $400 and $600 per SqFt. And in fact, this project was 70% sold at an average of $450 per square foot. The Acquisition price and the constructive budget make this project a very attractive alternative investment projecting above average returns. This property offers two attractive and profitable exit strategies depending on the condition of the real estate market. Given the type of high-end product that will be offered we will be able to charge current market rents averaging $2.04 per SqFt. This asset type will trade between a 5.00% and 5.50% cap rate as a rental building. If market conditions favor the sale of units we will pursue this exit strategy. Projections indicate that sale prices will be in the range of $320 to $400 per SqFt.
The construction phase of the project will begin immediately at time of purchase. Tenants will be able to move in one year after construction begins. However, pre-lease and strong marketing efforts will begin three months before completion. We estimate conservatively to rent seven units per month and reach 95% occupancy in month nine of the second year of the project.
Extensive market research supports the rents and occupancy projections. Our sponsor has the experience and track record to make this project a success. We believe this project provides a unique real estate opportunity by combining an attractive acquisition price, favorable transaction terms, value add opportunity, and highly skilled and experienced investment and management team.