Oak Row Equities paid $38.5M for a Downtown Miami development site where it is planning a 500-unit, luxury transit-oriented development.
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The investment and development firm has dubbed its planned high-rise First & Fifth at 49 NW Fifth St., across from the MiamiCentral Brightline station and transit hub. Oak Row, which has offices in Miami and New York, closed the deal through “structured attractive seller financing supported by in-place income,” it said in a release.
“First & Fifth exemplifies our thesis that the ability to live, work, and play within a short walk or train ride will become critical to a renter's decision process in South Florida,” Erik Rutter, managing partner at Oak Row, said in a statement.
A historic three-story office building constructed in 1925 will be preserved on the 18K SF development site just west of Miami Worldcenter. The parcel was sold by The Citadel Arena Corp., which paid $690K for the property in 1994, according to property records.
The Citadel entity is controlled by Daniel Arias and registered to a shopping center at 8356 Bird Road. An Oak Row spokesperson declined to say when First & Fifth was slated to break ground or provide additional details about the financing.
The project was designed by South Florida-based ODP Architects and references Miami’s Venetian architecture at the turn of the century, according to the release. Towering archways anchor the parking pedestal above ground-floor retail space.
First & Fifth’s development is part of Oak Row’s commitment to building transit-oriented developments, which the company called critical to its long-term thesis.
“This Downtown acquisition is a culmination of conviction, persistence, collaboration, and vision,” Oak Row Managing Partner David Weitz said in a statement. “We couldn't be more excited to continue planning this landmark transit-oriented development. We are eager to present First & Fifth to the capital markets and future tenants.”
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The MiamiCentral station, located diagonally from the First & Fifth site, is the connection point for the Brightline, Metrorail, Tri-Rail and Metromover. The Tri-Rail service began in January after a yearslong effort that officials expect will boost ridership.
Oak Row was founded in 2018 by Rutter and Weitz and controls around 4M SF of commercial space in South Florida. It topped off the 509-unit Wynwood Plaza apartment building in February with its partner, New York-based L&L Holding Co.
It broke ground in late April on a 41-story combination office and apartment tower in Edgewater after locking in a $181M construction loan from Bank OZK, which also financed Oak Row’s Wynwood project. The developer also has plans for a second Edgewater apartment tower called 2900 Terrace with Miami-based Lndmrk Development.
The apartment proposal comes as multifamily development has stalled in South Florida. Leasing fundamentals are softening after a pandemic-era run-up, with median rent in Miami at $3,300 per month and a concentration of supply at the high end of the market, according to Zillow.
Rents are down $200 year-over-year, but the decline has flattened in recent months. Zillow classified the market’s temperature as cool.
The macroeconomics and rising operating costs for multifamily assets — along with high borrowing and construction costs for any new project — are making it harder to make apartment developments pencil out.
The dynamic has led some developers in Miami to turn planned apartments into condos, unlocking buyer deposits to offset borrowing costs and shifting operations onto condo associations.
UPDATE, JUNE 18, 5 P.M. ET: The story has been updated to reflect plans to preserve the existing office building.
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