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Miami Apartment Developer Offers Discounts to Renters Who Surrender Their Parking Spaces

Melo Group is Betting Many Will Take Advantage of the Offer
August 1, 2018
Would you be willing to live without a car if it meant a break on your monthly rent? One apartment developer in downtown Miami is betting more prospective tenants will say yes.

Melo Group is handing out $100 monthly rent discounts at a new apartment project for people who surrender a set of wheels, though some analysts are skeptical the perk will work in such a spread out region as South Florida.

The developer is offering the incentive at its Square Station apartments in the city’s Arts & Entertainment District. To qualify, renters have to give up the one allotted complimentary parking space per unit when they move in to the transit-oriented development at 1424 NE Miami Place.

“While we've built enough parking spots for every tenant, our goal is to get people thinking differently about public transportation," Martin Melo, principal of Melo Group, said in a statement to CoStar News.

"People in Miami, especially, are so used to using their cars for everything. But if you work in Brickell/Downtown, why should you sit in your car in traffic for close to an hour to go 10 blocks when you can easily walk half a block from your doorstep to the free Metromover instead?"

Melo added that he hopes the incentive prompts other developers to offer similar programs to promote car-free living.

He noted that the program just launched last week, so the firm isn't yet releasing how many renters have taken advantage of the discount so far.

The newly finished project has two 34-story towers featuring a total of 710 units, more than half of which are rented, according to the developer. The one-bedroom units start at $1,650 a month, two-bedroom units start at $1,950 and three-bedroom units start at $2,500 per month.

Square Station is located within blocks of the Adrienne Arsht Center for the Performing Arts, AmericanAirlines Arena and other venues. The apartment complex has an adjacent Metromover station, and residents also can ride the nearby Miami Trolley.

  Related News: Transit-Oriented Developments in the Pipeline Across South FloridaJANUARY 08, 2018  |  PAUL OWERS

Since 2010, downtown Miami’s population has increased almost 40 percent to 92,000 residents, according to a study by the city’s Downtown Development Authority. Nearly half of those new residents are between the ages of 25 and 44, the study found.

That increased population is leading to frequent traffic snarls in the already-cramped downtown corridor, officials say.

Still, even with Uber and other ride-sharing options, it isn't practical for many people to go without cars in a region as spread out as South Florida, said Ken Johnson, an economist and professor of real estate at Florida Atlantic University in Boca Raton, FL.

“The intentions are good, but I don’t see this working,” he said.

In multifamily developments, a free month’s rent is the perk that typically gets a prospective renter’s attention, added Jack McCabe, a real estate consultant in Deerfield Beach, FL.

"I don't know that $100 off is going to make a person choose this building over another," he said.

Developers and other sellers have used other types incentives, from free sports cars to cruises. One former South Florida developer even offered to pay for a college prepaid tuition plan for buyers in a townhouse project during the housing bust.

Even so, when it comes to incentives in real estate, renters or buyers say the best perk is a fair deal, McCabe explained.

"The bottom line is always price," he said.

Melo hopes to build nearly 2,000 rental units in the city's Arts & Entertainment District. Aside from Square Station, it recently broke ground on the 667-unit Art Plaza at 58 NE 14th St. and also plans 437 units at Miami Plaza, located nearby at 1502 NE Miami Place.

Square Station is Miami-based Melo’s 15th residential tower in the downtown, giving the firm a current portfolio of 3,800 condominium and rental units, with nearly 3,000 more units in the immediate pipeline.

Paul Owers, South Florida Market Reporter  CoStar Group   
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