The foreign investors who have poured a fortune into Miami’s downtown luxury condominium market for rental investments are about to get some professional competition.
Zom, an Orlando-based apartment developer, plans to build a 46-story tower on land it purchased last week at 80 SW Eighth Street.
Rents will run from just under $2,000 to more than $4,000 a month, and the units will be range in size from about 500 square feet to about 1,200 square feet, Zom said.
The tower, designed by the architectural firm of ADD Inc., will boast a host of amenities and high-end finishes to make it competitive with luxury condos that are often turned into rentals by foreign owners.
The site, which is a little over half an acre, was acquired March 28 from a partnership of Banyan Street Capital and Crocker Partners for $16.8 million, according to Zom.
Zom expects to begin construction of the 462-apartment tower in the fourth quarter. The project will be close to both Mary Brickell Village and Brickell City Centre, the massive multi-use development that is under construction by Swire Properties.
Construction of the project, which is a joint venture with AIG Global Real Estate, is expected to take about two years, Zom said.
The project is Zom’s second in downtown Miami. The apartment specialist began its portion of construction March 22 at Montage at Met 3, a 32-story tower that is going up on top of the new Whole Foods market at 200 SE Second St.
The projects come as Miami is in the throes of a new condominium construction boom, with thousands of units in the works, financed largely by deposits from foreign investors who are likely to turn many units into rentals.
“These two projects are in a market that is severely under served with professional rental apartments,” said Greg West, chief development officer for Zom, which has offices in Fort Lauderdale
West said a professionally managed apartment tower will have competitive advantages over the one-off condo unit owners who lease out their Brickell and downtown units.
“When something breaks in an apartment, we’ll come and fix it while the renter is at work,” West said. “In a condo, the renter might have to coordinate with someone in a different continent. It’s very inconvenient.”
Other advantages, he said, include smaller deposits. And renters won’t face the specter of being tossed out because a unit is sold.
West said the locations of the projects are also compelling for renters.
The high-profile Brickell City Centre project — a $1.05 billion undertaking that will span 5.4 million square feet of office, residential, hotel, retail and entertainment space and underground parking — is already serving as a catalyst for other development in the neighborhood. City boosters expect it to transform downtown Miami into a 24-hour work-live-play center.
“The proximity to retail options couldn’t be any better,” West said of the new Brickell project.
Zom is joint-venturing the Montage at Met 3 project with an investment fund managed by UBS Global Asset Management.
After a long stretch without new rentals, Miami-Dade and Broward counties are getting thousands of new units. The developers are betting that the housing debacle will continue to shift more housing demand toward rental and away from ownership.
But the hot condo market has prompted some would-be apartment developers to shift gears.
Last year, the developers of a rental apartment tower in the works above the Publix at Mary Brickell Village at 999 SW First Ave. switched plans mid-project and turned it into a luxury condominium dubbed Nine at Mary Brickell Village. Observers say the change should bring the developers more profit and quicker.
But West says that won’t happen with Zom’s projects. “That’s not our intention. We invest in rental housing.”