Monogram Dialed Back SoMa Brickell Apartment Rents To Stabilize
SoMa at Brickell is finally stabilized in its leasing. But that's at a price, say officials with the developer Monogram Residential Trust.
CEO Mark Alfieri told analysts during a Q3 investment call that the 418-unit SoMa's yields were 7% above the original underwriting. That, plus a 6% above underwriting cost-stabilized yield for Verge in San Diego, is giving Monogram an estimated value creation of $45M, Mark told analysts.
But that lease-up came at a price on rents. Monogram's Peggy Daly told analysts that SoMa had to reduce rents toward the end of its lease-up period as more apartment competition hit the market.
"When we first started lease-up there, we came out...well above a pro forma rent. We ended above pro forma rent," Peggy says, adding Monogram was "aggressive" while market supply was limited. "Then, as the new supply came on, we found that we had to really moderate the rents during the latter part of the lease-up."
Neither Peggy nor Mark shared specific rent numbers on SoMa.