Commercial Real Estate, Capital, Insurance, Leasing & Management

Franklin Street broker works $6M sale

Published By: 

The Deal: The Franklin Street Real Estate Services broker represented the seller and helped arrange the $6.05 million sale of a 73-unit apartment complex in Hialeah.

Dealmakers: Deme Mekras

The Deal: The Franklin Street Real Estate Services broker represented the seller and helped arrange the $6.05 million sale of a 73-unit apartment complex in Hialeah.

Details: The deal for two rental properties shows just how confident investors are that they can extract future rent increases from tenants, according to Mekras, a broker to who helped arrange the transaction for the seller.

The deal for two five-story building on West 29th Street in Hialeah closed on New Year’s Eve for $6.05 million. The seller, New York real estate investor Centerline Capital Group, acquired the property from Fannie Mae in 2012 foreclosure sale. The buyer, Coconut Grove Park Inc., is linked to Miami real estate investor John C. Scurtis and Greek-Panamanian entrepreneur Haralambos Tzanetatos.

Mekras said the relatively low capitalization rate seen in the deal – 6.3 – was the result of an investor seeking the security of a multifamily building in a market starved for rental product. It also reflects the fact there’s room to increase rents in much of Hialeah, he said.

“The submarket is an extremely tight submarket in terms of the tenancy,” Mekras said. “If you’re not 99 percent rented and 98 percent collected, you’re not managing well. It’s a market that’s almost entirely built out, and there’s no new product.”

As for rents, Mekras noted a similar nerby building was recently advertising on-bedroom units for $825 per month. In 2005, the rent was $600, Mekras said.

In the transaction he helped broker, Mekras anticipated strong demand from multifamily investors used to the area, who put a premium on dependable cash flow.

“It’s a pretty rare occurrence to get a property over 50 units in that market, and this was 73,” Mekras said. “This was a preservation of capital and cash-flow opportunity for the investor. The intention here is to hold for cash flow.”

The deal was sped up by the fact “the buyer that ultimately closed the deal had a relationship with the bank that had the current loan on it.”

“It was a matter of confidence on all three ends, and the buyer was able to put in an abbreviated due diligence period,” Mekras noted.


Background: Mekras has led the Miami office of Franklin Street as regional managing partner since 2013. Download PDF

let's Connect

drop us a line