Franklin Street announces the sale of Rancho Luna for $1,625,000 as part of a 1031 exchange land transaction.
Franklin Street’s Deme Mekras and Elliot Shainberg represented both the buyer and the seller in the transaction. The buyer is First American Exchange Company, LLC, a qualified intermediary for Florida LLC Balogh Family Partnership, LLC and Housing Trust Group, a local developer, who plans to maintain the property as an income-producing commercial property with an interest in multifamily development. The seller Rabelo Real Estate Enterprises#1, LLC owned the property for multiple decades.
“This transaction was a highly structured 1031 exchange between the buyer and the seller,” Mekras said. “This transaction shows that buyers are willing to get creative and take unique risks in order to make deals work in core areas.” Mekras added that while the property’s current use is not typical of the buyer’s acquisition targets, it is in a prime location for an alternative, redeveloped use of affordable multifamily housing. “This local developer believes in the long-term value of the location and was willing to buy the asset with no guarantee that they will obtain Tax Credits to subsidize the development of affordable housing because they will have sufficient cash flow in the meantime.” The property is currently operating with two tenants, one of which is the oldest Cuban restaurant in Miami, Rancho Luna, and a car wash.
Previously, the property was on the market at the end of 2012 and part of 2013 pending a tax credit funding application which was not obtained.
“We did put the property under contract at above our previous asking price, which was well north of a million dollars higher than the price it ultimately sold for the next year. The previous high price was only feasible with the rare possibility that a developer was able to secure low income housing tax credits to subsidize construction, which unfortunately never materialized,” Mekras said. “When the property ultimately sold, it was at a reduced price more in line with the market and a price that was necessary considering the risk and opportunity the site offered the market and the ultimate buyer.”
The property is located at 45 N.W. 22 Ave. in Miami, Fla. in the submarket of Little Havana comprised of two commercial tenants. Little Havana is known for its landmarks including Calle Ocho (S.W. 8 St.) and its Walk of Fame, the Firestone/Walgreens Building, and most-recently, the new Marlins ballpark. The area has eight elementary schools, three middle schools, three high schools, three libraries, and Miami-Dade College’s InterAmerican campus.
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