September 30, 2019 – BH3, a real estate investment and development firm specializing in distinctive projects and assets, plans to develop a nine-story, 86,000-square-foot retail and showroom project at the southwestern entrance to the Miami Design District. The development at 3801 N. Miami Ave. will be the first and largest ground-up Opportunity Zone project in the submarket, which is one of the most desirable designated Opportunity Zone locations of the over 8,000 designated zones across the United States.
For the development, BH3 purchased two parcels at 3801 and 3819 N. Miami Ave. for a total of $15.1 million in 2017. The project is fully entitled and received its final and non-appealable site plan approval in August 2019. Ground breaking is anticipated for second quarter 2020 with delivery in third quarter 2021.
“We acquired the properties for the development before the Opportunity Zone legislation, as we were attracted to the location prior to the incentives,” said Gregory Freedman, principal and founder of BH3. “In 2019, we structured and established an Opportunity Zone fund specifically for the Design District project, and the fund will provide qualified investors with the full tax benefits afforded to them under the legislation.”
BH3’s Opportunity Zone fund, 3801 NMA OZF, LLC, will close its offering to qualified investors on or before December 31, 2019. Investors will have the opportunity to garner the benefits under the legislation of: (i) Deferral of taxes until 2026; (ii) Tax-sheltered income following completion of construction; and (iii) Tax-free appreciation on the project following the 10-year hold period.
The current retail and office structures on the Design District parcels will be demolished to accommodate the 86,000-square-foot building. It will feature 25-foot ceilings on ground level, 14-foot ceilings on floors 2 through 9, and open floor plans with great Interstate 195 exposure. While rents are not final, preleasing is slated to commence in October 2019 with estimated rents in the range of $45 to $55 triple net per square foot, significantly less than other retail space in the market.
“The project is poised to satisfy pent-up demand of retailers, fashion brands, hardgoods, and showroom users that want to be in the Design District but don’t require ground floor locations and the higher rents associated with them.”
Segal Suarez is the architect for the development.