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1550 Meridian Avenue
Flamingo Park Historic District South Beach
Neal R. Deputy
690 Lincoln Road
Miami Beach, FL 33139
Cell: (305) 467-4026
OFFERING MEMORANDUM
A Premier Multifamily Asset in the Heart of South Beach
$2,049,000
Architect’s Rendition by Tony Leone Architect
CO
NTE
NTS
Cover
Contents
Introduction
Location & Environs Map
Existing Floor Plans
Exterior Photographs
Interior Photographs
Existing Income & Expenses
Market Rate Proforma
Converted Proforma
Comparable Recent Sales
Expansion Plans
About South Beach
About Miami
Notes to Bidders
01
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07
09
11
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02
CONTENTS
INTR
OD
UC
TION
03
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 1.25. 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 15-17 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.
-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.
Typical Dining Area
INTRODUCTION
Alton Road Arts District World Famous Ocean Drive
Flamingo Park
LOC
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EN
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AP
04
Sailing the Bay Lincoln Road Mall Fun in the Sun
Miami Beach Convention Center
Collins Ave Entertainment Zone
Bayshore Municipal Golf
South Beach
1550 Meridian Avenue
ZO
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TION
LETTE
R
05
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LOO
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EXISTING GROUND FLOOR PLAN
05
EX
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LOO
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LAN
EXISTING SECOND FLOOR PLAN
06
B-3
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Entryway to Interior Stair
Halls
Apartment
Building at
Rear of
Property
Lovely Art-Deco
Styling and
Ornamentation
07
Pool in Rear Yard for
Private Use of Tenants
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.
EX
TER
IOR
PH
OTO
GR
AP
HS
08
INTE
RIO
R H
OTO
GR
AP
HS
09
Lovely Kitchens with Glass
Cabinets and Granite
Counters
Typical Dining
Room with Arched
Openings and
Beautiful Wood
Floors
Large Living
Rooms with
Sleeping Nook
Beyond
INTE
RIO
R P
HO
TOG
RA
PH
S
10
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.
APT # TYPE: RENT PROPERTY TAXES $19,678
1 1 Bedroom $1,445 INSURANCE $3,048
2 1 Bedroom $1,300 COMMISSIONS $2,175
3 1 Bedroom $1,300 WATER/SEWER $7,538
4 1 Bedroom $1,545 ELECTRIC $1,513
5 1 Bedroom $1,350 TECO GAS $1,515
6 1 Bedroom $1,250 WASTE MANAGEMENT $2,018
7 1 Bedroom $1,250 FIRE INSPECTION $107
8 1 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
VACANCY @ 1% $1,304
Total: $53,059
Total: $10,870 Total Expenses:
Monthly $4,422
Total Scheduled Income: Annually $53,059
Monthly $10,870
Annually $130,440 NOI:
Monthly $6,448
CAP RATE = 3.8% Annually $77,381
EXISTING INCOME & EXPENSES
EX
ISTIN
G R
EN
TAL P
RO
FO
RM
A
The Cap Rate represented above is for the existing 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 13.
11
APT # TYPE: RENT PROPERTY TAXES $19,678
1 1 Bedroom $1,850 INSURANCE $3,048
2 1 Bedroom $1,650 COMMISSIONS $2,175
3 1 Bedroom $1,650 WATER/SEWER $7,538
4 1 Bedroom $1,850 ELECTRIC $1,513
5 1 Bedroom $1,850 TECO GAS $1,515
6 1 Bedroom $1,650 WASTE MANAGEMENT $2,018
7 1 Bedroom $1,650 FIRE INSPECTION $107
8 1 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
VACANCY @ 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 = 5.6% Annually $115,753
13 M
AR
KET R
ATE
REN
TAL P
RO
FO
RM
A
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%
MARKET RATE RENTAL PROFORMA
12
Monthly Income: Annual Expenses:
APT # TYPE: RENT PROPERTY TAXES $19,678
1 2 Bedroom $2,250 INSURANCE $3,048
2 1 Bedroom $1,650 COMMISSIONS $2,175
3 1 Bedroom $1,650 WATER/SEWER $7,538
4 2 Bedroom $2,250 ELECTRIC $1,513
5 2 Bedroom $2,250 TECO GAS $1,515
6 1 Bedroom $1,650 WASTE MANAGEMENT $2,018
7 1 Bedroom $1,650 FIRE INSPECTION $107
8 2 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
VACANCY @ 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
CO
NV
ER
TED
MA
RK
ET R
ATE
PR
OFO
RM
A
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 $8,000.
CONVERTED MARKET RATE PROFORMA
13
Address Month Sale Price BLD'G SF Cost/ SF Units Cost/Unit Assesment AVR
1101 Euclid MAR $3,200,000 6,666 $480 16 $200,000 $1,046,025 3.06
1113 Meridian JUN $3,050,000 7,417 $411 14 $217,857 $1,276,947 2.39
1604 Michigan JUN $1,875,000 4,031 $465 10 $187,500 $1,300,000 1.44
1310 Euclid JUL $2,280,000 7,324 $311 12 $190,000 $1,191,311 1.91
612 15th JUL $3,450,000 6,406 $539 16 $215,625 $1,507,436 2.29
620 Michigan AUG $1,565,000 5,378 $291 8 $195,625 $820,024 1.91
1685 Jefferson SEP $3,800,000 8,185 $464 20 $190,000 $1,733,012 2.19
1619 Meridian JAN $2,660,000 5,969 $446 12 $221,667 $1,408,000 1.89
310 Meridian JAN $3,500,000 7,013 $499 17 $205,882 $1,633,500 2.14
1025 Meridian FEB $2,823,600 7,166 $394 12 $235,300 $1,430,000 1.97
1251 Euclid FEB $2,908,600 7,342 $396 14 $207,757 $1,460,676 1.99
1619 Meridian JAN $2,660,000 5,969 $446 12 $221,667 $1,408,000 1.89
310 Meridian JAN $3,500,000 7,013 $499 17 $205,882 $1,633,500 2.14
1567 Meridian FEB $5,850,000 15,723 $372 29 $201,724 $3,167,780 1.85
TOTAL: $43,122,200 101,602 209
AVERAGE: $430 $206,326 2.20
RECENT COMPARABLE SALES R
EC
EN
T CO
MP
AR
AB
LE S
ALE
S
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.
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EXPANSION PLANS- FIRST FLOOR
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EXPANSION PLANS- SECOND FLOOR
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EXPANSION PLANS- THIRD FLOOR
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EXPANSION PLANS- ELEVATIONS
Above: View of Approved Phase II Construction
Above: View of Approved Phase II Construction from Meridian Avenue
Above: View of Approved Site plan
Miami Beach is a coastal resort city located
in Miami-Dade County, Florida. Incorpor-
ated 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 1943. 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: 38.9 yrs Median Resident Age in FL: 40.5 yrs Average household size in 33139: 1.7p Average household size in FL: 2.6p Average AGI in 2010 in 33139 $89,607 Average AGI in 2010 in FL $50,523 Average Wages filed in 33139: $52,304 Average Wages filed in FL: $39,563 33139 population in 2010: 32,255 33139 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 : 117.2 Well above U.S. average: 100.0 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
19
AB
OU
T SO
UTH
BEA
CH
ABOUT SOUTH BEACH
AB
OU
T MIA
MI
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.
20
AB
OU
T MIA
MI
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. 1550 Meridian
Avenue provides a solid investment for the discerning investor, developer, or operator
with tremendous upside potential and long-term value.
21
NO
TES TO
BID
DER
S
NOTES TO BIDDERS Building is for sale “As-Is” and no credits to purchase price will be granted. 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.
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