Recently opened, institutional-quality mixed-use project with 204 multifamily units (99.5% leased), a 245-key hotel, ground-floor amenity retail, and three chef-driven food & beverage concepts, located in Coral Gables, FL next door to the Univ. of Miami.
Newly Constructed Mixed-Use Investment: The Residences at Thesis opened for resident occupancy in July 2020 in the highly desirable but “development restrictive” market of Coral Gables, FL, followed by THesis Hotel opening in August, and the My Salon Suites retail space in September. As of June 17th 2021, the multifamily component is 99.5% leased, while the hotel, retail, and parking garage components are moving toward stabilization. THesis Miami offers investors the opportunity to invest in a stabilizing asset with an almost fully-leased multifamily component as well as three high-end food & beverage outlets run by nationally recognized chef Niven Patel. Two of the restaurants, Mamey and Mamey on 3rd are open, and the third F&B concept, Orno, is expected to open in July 2021.
University of Miami Demand Driver - Across the Street from Campus: THesis Miami is ideally located across from the University of Miami’s Coral Gables campus and Lennar Medical Center, and next door to the University’s 300,000 SF administrative office building. We believe that the proximity to campus is a significant long-term demand driver for THesis Miami, benefitting the hotel, multifamily, and retail alike. Given its prime location and best-in-class amenities, The Residences at THesis is positioned to benefit from the University’s on-going housing constraints.
Highly-Desirable Food & Beverage Concepts: The Hotel’s food and beverage program features three original concepts, Mamey, Mamey on 3rd, and Orno, by 3x James Beard Award Nominee Chef Niven Patel. Chef Patel was also named one of the Best New Chefs in America by Food and Wine Magazine in 2020. Partnering with a nationally recognized and locally celebrated chef such as Niven should both increase hotel demand and provide an outwardly focused F&B program serving, residents, tourists, as well as members of the University of Miami and local communities.
Significant Sponsor Co-Investment at Cost Basis: As a testament to its belief in the Property, the Sponsor is contributing 100% of its interest in the project, $17.0 million in equity, resulting in a significant 18.5% sponsor co-investment. Investors have the opportunity to invest in THesis Miami at the Sponsor’s current cost basis.
Local, Tenured Sponsor with Deep Market Knowledge: Nolan Reynolds International, headquartered in Coral Gables, FL, has a history that, together with its affiliates, dates over 130 years with over $6 billion in construction and development value. Indicative of their commitment to quality product and service excellence, in 2019 NRI’s Casa Chameleon Hotels, located in Costa Rica, achieved multiple iconic industry awards, editorial accolades, and media coverage in major top-tier publications around the world, including being ranked as the 52nd best hotel in the world by Travel + Leisure Magazine.
THE BUSINESS PLAN
THesis Miami opened for resident occupancy in July 2020, followed shortly by hotel guest occupancy in August 2020 along with Mamey, the first of three food & beverage concepts at the Property. The first retail tenant, My Salon Suites, opened shortly thereafter in September 2020. The Sponsor successfully stabilized the multifamily units (99.5% leased as of June 17th, 2021) within eight months of opening, representing an absorption of more than 20 units per month. The Sponsor plans to continue ramping up the Property’s other components including the hotel and garage, as well as finalizing the programming mix and leasing of the remaining commercial retail space.
The Hotel opened August 5th, 2020 to accommodate UM’s fall semester re-opening and new student orientation, achieving an ADR of $225 for the week of August 9 – August 15, 2020, which was 140% of the Property’s STR competitive set average for that week. The first scheduled food and beverage (F&B) concept, known as Mamey, opened to the public on August 11, 2020 with outdoor dining in the open-air Paseo. Despite opening during a period of limited seating capacity and operating hours per Miami-Dade County mandate, Mamey’s August revenues exceeded $125k, and continued to ramp up quickly with 85% month over month revenue growth in September 2020 and 48% month over month revenue growth in October 2020. Food & Beverage performance continued to improve with the November 2020 opening of Mamey on 3rd, an extension of Mamey in a rooftop setting. Despite Orno restaurant yet to open, the F&B program in May generated over $740,000 in revenue, surpassing forecasted stabilized revenue for the entire F&B program of roughly $650,000 per month.
With the multifamily component almost fully leased, the focus of the Property’s business plan is to ramp the hotel to the market’s pre-COVID levels and finish leasing the remaining commercial retail space by early 2022, while continuing to drive rents on multifamily renewals and new leases. The Sponsor expects parking revenues to increase as the other non-residential components stabilize and further activate the Property. The University of Miami (the submarket’s largest demand driver) is expected to fully re-open the campus in August 2021 for the first time since the onset of COVID. As an independently branded Hotel, THesis can nimbly implement innovative initiatives and adapt to changing market conditions, while maintaining maximum flexibility to cater to the University’s various needs and stakeholders. Unlike any direct competitor, THesis Miami is across the street from the University’s main campus and its Metrorail Station, both of which serve as an anchor to the Coral Gables submarket and surrounding area. With what we believe to be a superior food & beverage offering, best-in-class multifamily amenities, and an unrivaled location, THesis Miami will create a thriving community with connectivity at the center of a live, work, play mindset. The confluence of these deep value propositions is expected to appeal to the growing and affluent demographic base within Coral Gables.
The retail vision for THesis Miami is to create a vibrant gathering space centered around food and beverage, and with a focus on personal care & wellness, serving to both activate and amenitize the Property, while serving the surrounding community. To date, NRI has executed leases with My Salon Suites (4,413 SF) which opened in September 2020, as well as All Smiles Pediatric Dentistry (2,775 SF), which is expected to open early next year. NRI is in active negotiations with three additional tenants to take the remaining 16,000 SF.
THE PROPERTY
Developed and owned by Nolan Reynolds International (the “Sponsor”, or “NRI”), THesis Miami is a newly constructed, 770,000 SF, mixed-use Property in the affluent Miami submarket of Coral Gables, FL. Located on 2.67 acres across from the University of Miami, THesis Miami consists of 245 hotel rooms, 204 multifamily units, three chef-driven restaurants led by three-time James Beard Award nominee Niven Patel, and 30,000 SF of ground floor retail space. THesis Miami opened for resident occupancy in July 2020, hotel guest occupancy in August 2020, followed by the opening of retail tenant My Salon Suites in September 2020. The multifamily component has successfully stabilized to approximately 99.5% leased occupancy as of June 17, 2021 at a blended potential rent of $3.18 per SF, the highest PSF rents in the Coral Gables multifamily submarket on currently open properties.
THesis Hotel (the “Hotel”) is an independent brand developed by NRI, which maintains the flexibility to accommodate the high (and varied) demand from the myriad schools, group business, and visitors associated with the University of Miami. The site’s location across from the University and connection to campus via a recently constructed pedestrian footbridge is expected to help capture the significant lodging demand generated by the University. Given the lack of quality multifamily supply in the immediate vicinity, The Residences at THesis will serve the market’s growing demand for premium residential product. NRI looks to stabilize the Hotel by 2023, in line with STR’s hotel recovery projections, and has already stabilized the multifamily component at 99.5% leased occupancy as of June 17, 2021.
THE LOCATION
THesis Miami enjoys excellent vehicular access given its position directly on US1 (113,018 VPD), located between the Palmetto Expressway (3.5 mi southwest), and Interstate I-95 (5.0 mi northeast), two of the most trafficked South Florida thoroughfares. The site also provides direct access to Madruga Avenue to the south, connecting the Property to the neighboring residential community. THesis Miami reflects an attention to transit-oriented development, by way of a recently constructed pedestrian footbridge less than 300 yards from the site, providing both residents and visitors with connectivity to the University Metrorail Station. THesis Miami’s proximity to the Metrorail allows for a short commute to Brickell’s Financial District, as well as Downtown Miami’s new Brightline train station with stops in Fort Lauderdale, Palm Beach, and eventually Orlando.
THesis Miami’s accessibility is further augmented by its proximity to the Underline, a 10-mile linear park beneath the Metrorail, stretching from Brickell to Dadeland, with pedestrian and bike trails running parallel to US1. THesis Miami boasts excellent visibility due to its prime frontage along US1, serving as a competitive advantage for the Property relative to other multifamily and hospitality assets in the Coral Gables and South Miami submarkets.
NEARBY AMENITIES
DEMOGRAPHICS
ASSET CLASS MARKET
Demand for apartments has surged across Greater Miami in recent quarters, driving rental rate growth while compressing vacancy. More than 5,000 units has been absorbed on a net basis since October 2020, which has compressed market vacancy to a six-quarter low.
There are more than 11,000 units under construction across the greater Miami MSA, however the high barriers to entry in the Coral Gables submarket act as a risk mitigant to absorption concerns. The average rental rate for multifamily units in the Miami MSA is projected to remain higher than the National Index, as has been the case for more than a year.
CORAL GABLES SUBMARKET
Coral Gables achieves some of the highest apartment rents among Miami's submarkets, and continues to remain one of the Miami metro's most desirable communities from an investment perspective due to favorable demographic trends and high barriers to entry. The strong fundamentals underpinning Coral Gables contribute to its position along with Downtown Miami as the two submarkets accounting for more than 50% of the ongoing apartment construction in Miami-Dade County. As this new supply comes online, vacancies in the Coral Gables submarket have the potential to climb, although population growth and a scarcity of affordable single-family homes should act as mitigants to this risk.
With thousands of new units competing for renters amid the ongoing coronavirus pandemic, Coral Gables incurred some of the steepest rent losses in the early months of the pandemic. Rents have rebounded sharply in 2021, with rents fully recovering the COVID-related losses by late March 2021. Multifamily rent growth is currently approximately 4.5% on an annual basis, in line with the Miami metro average. Coral Gables’ average rent is more than $2,000/month, roughly 25% higher than the metro average.
Multifamily sales volume has slowed in the Coral Gables submarket in the past year, as it has across Miami amid the pandemic. However volume has picked up markedly in 2021. Sales volume hit a five-year low of roughly $20 million in 2020, but rebounded to $120 million with the April sale of Twenty2West for $97 million.
TENANTS
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