An investment group is making a long-term play in Miami’s Overtown thanks in part to its Opportunity Zone designation.
BrickOne Group, led by Costantino Cicchelli, Frank Rodriguez Melo and Stefano Garofoli, paid about $5.4 million for the three buildings with 66 apartment units at 149 Northwest 11th Street, 1232 Northwest First Place and 1201 Northwest Second Avenue in Miami, Melo said. The deal breaks down to about $81,250 per unit.
Cedano Realty Advisors and Marcus Millichap brokered the sales. Bahia Apartments LLC, led by Horacio and Marcela Segall, sold the buildings, property records show.
Melo said the competition for smaller properties in the neighborhood is strong. “There are very limited opportunities to begin with in Overtown. We had to act very quickly,” he added.
The properties are also about three blocks away from Brightline’s MiamiCentral station.
BrickOne Group plans to buy about 300 to 500 more affordable apartment units in the next two years, with a heavy focus on units in Opportunity Zones. The program, part of the federal tax overhaul, provides tax incentives to developers who invest in historically distressed neighborhoods throughout the U.S. There are 8,700 communities that have been designated as Opportunity Zones, and 67 of those are in Miami-Dade County.
In South Florida, developers who plan to take advantage of the program include Richard LeFrak and the Soffers at their planned $1 billion SoleMia project, Tony Cho and his partners at Magic City in Miami’s Little Haiti neighborhood, as well as others in Little Haiti.
The program’s biggest advantage is that it allows investors or developers to defer or possibly forgo paying capital gains taxes, or taxes resulting from the sale of certain types of assets.
Melo said he and his partners plan to maintain the apartments they just purchased, a mix of one and two-bedroom units asking between $800 and $900 a month in rent.