Air Communities REIT Buying South Florida Rentals for $471M
By Julia Echikson November 7, 2022 5:21 pm
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Even as interest rates continue to climb, Air Communities is shelling out $471 million for two South Florida rentals.
The move comes as the Denver-based REIT is looking to shift to growth markets, and away from highly regulated Northern markets, according to its latest quarterly report.
In the first deal, Air Communities paid $173 million for The District at Flagler Village, a 350-unit building in Fort Lauderdale, per its report.
Mill Creek Residential completed the 24-story tower, at 555 NE Eighth Street, last year, after buying the site for $10.6 million two years prior. Monthly rental rates range between $2,301 and $3,847, according to Apartment.com.
In the second deal, AIR Communities is under contract to buy the Southgate Towers in Miami Beach for $298 million. Located at 900 West Avenue facing Biscayne Bay, the 14-story building, constructed in 1958, features 495 apartments. The deal is expected to close this coming January.
The deals are the latest South Florida acquisitions for Air Communities, which apartment giant Aimco spun off as a separate REIT in 2020. In June, Air Communities paid $211 million for Modera Biscayne Bay, a waterfront rental in Miami.
Fueling the deals is a lack of regulations in South Florida. Air Communities is “reallocating capital into higher growth submarkets, such as Miami-Dade and Broward counties” and is looking to reduce its portfolio in New York and Chicago, markets saddled with “regulatory risk.” The firm’s revenue increased by 9.6 percent and net operating income by 13.3 percent in the third quarter compared to the same term in 2021.
Julia Echikson can be reached at Jechikson@commercialobserver.com.
Correction: Mill Creek Residential bought the parcel at 555 NE Eighth Street for $10.6 million — not for $3.7 million as originally reported.
