301 SE 6 Avenue, Homestead, FL
Number of Units: 112
Net Rentable Area: 103,200 S.F.
Number of Buildings: 7
Asset Type: Multifamily
Riverwalk II Apartments is located in Homestead, Florida, approximately 30 minutes south of the city of Miami. Major thoroughfares include Campbell Drive to the north, US-1 to the west and Florida’s Turnpike to the east. The property sits on four acres, with a central lake and offers amenities such as a pool, clubhouse, laundry facilities and renovated unit interiors.
Ytech acquired this asset on March 2013 from a private equity group and invested more than $1.1 million into redeveloping the property and repositioning it within its submarket.
The project was originally developed under a Land Use Restriction Agreement (LURA) with construction financing provided through Section 42 credits by the Florida Housing Finance Agency. Consistent with LURA requirements, approximately 80 percent of the property’s units were set aside and rented to tenants who earn no more than 60 percent of the area median income (AMI). Additionally, 20 percent of the property’s units must be rented to tenants who are both farmworkers and earn no more than 50 percent of the AMI.
The LURA presented a challenge for the previous owner as the majority of prospective buyers were not familiar with its restrictions and ongoing reporting requirements. The owner believed it would be a handicap for the operation of the property.
Ytech conducted an in-depth analysis of the existing Land Use Restriction Agreement on the property and the Homestead market. As a result, Ytech was able to determine that 50 percent of the submarket’s households met the existing LURA restrictions. Thus, Ytech was able to acquire the property at a significant discount and assigned its management team to stabilize occupancy. One year later, the property achieved a stabilized occupancy of 95 percent and a net operating income (NOI) increase of more than 35 percent.