Investors led by Walnut Street Capital, LLC, paid $1.046 million for two parcels in the hot Flagler Village area just north of downtown Fort Lauderdale.
Fort Lauderdale-based Walnut Street sponsored the acquisition of adjacent parcels at 611 and 617 Northeast Fourth Avenue, which span a total of 16,875 square feet.
Multifamily housing development has boomed in Flagler Village, but what Walnut Street will try to build there remains to be seen. Zoning for its two parcels on Northeast Fourth Avenue would allow for building heights up to 12 stories.
“I’m OK with waiting a year to see what happens when you have a few more products get delivered to the market,” Arthur Bartholomew, the owner of Walnut Street, told The Real Deal.
“Multifamily is a little saturated right now,” Bartholomew said. “We’ll give what the market needs. If there’s not demand for multifamily, we’ll get some other type of project approved, whether that’s street-level retail with offices, retail with condos. We’re flexible.”
For now, Walnut Street plans to rent residential properties that occupy its two-parcel assemblage on Northeast Fourth Avenue. “That’s why we like it, instead of just land-banking, which is a negative carry,’ Bartholomew said.
A single-family home occupies the 617 Northeast Fourth Avenue parcel and generates $2,500 of monthly rent, he said.
A boarded-up house and a two-story duplex occupy the other parcel.
“We’re in the process of fixing up the main house with the duplex behind it. We’re just about to take the boards off the windows. We also hired a graffiti artist to give the house a Wynwood-esque paint job,” Bartholomew said. “A charity owned it. It had been a drug rehab facility. Right before [Hurricane] Matthew, they boarded it up. And then they had issues with vagrants and drug addicts breaking in. They also got flagged for permit issues.”
The price for Walnut Street’s two-parcel assemblage on Northeast 4 Avenue was $62 per square foot, about half of the price per square foot that developers Morgan Group and Alta Developers paid for land for multifamily projects in the same vicinity, Bartholomew said.
Miami-based Alta is building a 12-story multifamily housing development with 208 units at 421 Northeast 6th Avenue. Houston-based Morgan Group is building a 350-unit rental housing complex at 400 Northeast 3rd Avenue. Morgan last year sold a 332-unit rental apartment development called the Edge at Flagler Village to financial services giant TIAA for $114.4 million.
In November, Lennar Corp. got a $61.7 million loan from Wells Fargo Bank to finance construction of 386 apartments in Flagler Village.
Among other developments in Flagler Village is a 12-story, 99-unit residential project called Flagler 626. A group of Israeli developers listed the site for sale for $3.5 million after the Fort Lauderdale City Commission approved the development in September.
Some developers like Flagler Village because it is close to mass transit developments, including a Fort Lauderdale streetcar system called the Wave and the Brightline passenger train service between Miami and West Palm Beach with stops in Fort Lauderdale, scheduled to launch in summer.
Bartholomew said he sees more promise in the planned streetcar system than the passenger train service because “I don’t know how many people are going to live in Fort Lauderdale and commute to Miami that way.”