Miami on the Bay

Building Overview

This is for future condo conversion or total redevelopment. Building is 99-100% occupied at approximately $1 per square foot.  Building consists of thirty seven one bedrooms at 800 square feet and twenty one two bedrooms at 1,300 square feet.  As leases come due, the renewals are approximately at $1100 per month for the 1 bedrooms ($1.08 per sf) and $1,400 for the 2 bedrooms (1.38 per sf). The Florida International University of Fine Arts was the tenant on the property until December 2009.  They occupied 100% of the building for student housing, which began leasing in July 2008.  The University’s one-year lease expired in July 2009.  They were unable to reach an agreement on an extension and vacated in December, 2009. The NOI the year the school was a tenant was +/-$675,000.  Since December 2009, the owner began marketing the property for lease at below market( between $.92 and $1.12 per s.f.) rents in order to compete with all of the unsold condos that are now being rented in the downtown area and the building is now 98% leased.

The building was built in 1982.  In 2006, all of the kitchens were redone with wood cabinets and all but 3 have granite counter tops.  All of the appliances were replaced in 2006. There is a stacked washer and dryer in each unit.  Most floors are tiled and some of the baths have been updated. Each unit has its own central AC system. All AC units are less than 3 years old. The roof was recently resurfaced. There are +/-96 parking spaces and room to add more. There is a small gym, a large pool, and dressing rooms with saunas. All units have very large terraces. Current owners paid $17 million for the property in 2005 and spent a considerable amount on improvements.  There is a Major Use Special Permit in place on the property that would permit a 129 unit condo to be built if the existing building was removed.  That permit is good until 2012.   The current full recourse debt is $9.9 million.  Lender filed a foreclosure in late August 2010, and they have currently negotiated an extension with the owner.  Owners have said they would cooperate with a buyer who obtains the note from the lender and relieves them from any further liability with additional amounts to cover commissions.  The listing agent has stated he believes the lender would entertain selling the note in the $8 million range.  This is not a cap rate deal.  It is a deal for a land banker or converter who sees the upside potential.

5 Year Profitability & Exit Plan

First Year Profitability:

Income:             $1,221,552

Expenses:         $  724,565*

Net Profit:          $496,986

Fifth Year Profitability:

Income:             $1,383,679

Expenses:         $  872,984*

Net Profit:          $  510,694