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Value-Add Rentals for Sale in Miami, Davie

Owner Hopes to Find One Buyer for Both Assets
February 21, 2018
The Gardens at Nova (left) in Davie, FL and Sundance Village apartments in Miami are listed for sale with Colliers International.

Two garden-style apartment properties totaling 444 units have hit the market for the first time, offering value-add opportunities for potential buyers.

Sundance Village at 11325 NW Seventh St. in Miami, and the Gardens at Nova at 6857 College Ct. in Davie, FL are both more than 20 years old and have few amenities, but they're well-maintained and should draw plenty of interest, said listing agent Larry Stockton of Colliers International.

"These are the kinds of assets the market is going to fight over," he told CoStar News. "You're starting with excellent bones on these. They're both solid, secure assets."

The assets are being marketed without an asking price, but the owner, Poinciana Properties Inc. of Coral Gables, FL, will proceed to contract if it gets an acceptable offer before the March 12 deadline for bids, Stockton said. The owner will sell to separate buyers, but the strong preference is to package the properties to one buyer, he noted.

Poinciana, a company run by three brothers, is selling the apartments now for estate-planning purposes, said Stockton.

The 304-unit Sundance Village was built in 1988. It's a mix of two- and three-bedroom apartments with an average monthly rent of $1,600 for two bedrooms to $1,800 for three bedrooms, according to Colliers. It has two small pools, but no clubhouse or fitness center.

The 140-unit Gardens at Nova, built in 1997, offers all two-bedroom units with an average asking rent of $1,600, according to Colliers. The complex is across from a campus featuring Nova Southeastern University, Florida International University and the University of Florida. It's also within walking distance of Whole Foods, Trader Joe’s, Costco and Home Depot. It has a clubhouse and a pool, and only added a fitness center last year, Stockton said.

"There's an opportunity for developers to add curb appeal," he said. "Not until you get on the properties do you see how cozy they are."

Multifamily sales in South Florida remain strong, though short of the 2016 peak, analysts say.

In a multifamily report last year, Cushman & Wakefield noted that household formations in the tri-county region are expected to grow by more than 50,000 a year in the next five years. Even conservatively projecting 40,000 a year, with 40 percent choosing to rent, would translate into 16,000 new renters a year in South Florida, according to Cushman.

What’s more, millennials and some families believe they can generate wealth faster by renting than owning.

To respond to increasing demand, developers delivered more apartment units in Miami from 2015-17 (13,363) than in the preceding 15 years combined (10,846), according to Pamela Stergios, a market analyst for CoStar Market Analytics. Supply in the Fort Lauderdale and West Palm Beach metros has been strong for the past five years, she added.

The Fort Lauderdale metro ranked among the top 20 markets nationwide with a 3.1 percent rent growth from fourth quarter 2016 through fourth quarter 2017, according to a CoStar multifamily report.

Stergios said the vast majority of the new projects are equipped with condominium-style finishes and an array of amenities and are located downtown and in other desirable neighborhoods.

"It is not surprising that investors are targeting older, well-located apartment buildings and renovating them to push rents," Stergios said. "There is a lot of demand for sub-$1,500 units, and landlords have the ability to continue to push those rents because of renters’ limited alternatives."

Paul Owers, South Florida Market Reporter  CoStar Group   
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