Construction started on The Six13 apartment building in Fort Lauderdale after the developer secured $19.3 million in project financing.
Affiliated Development LLC, a Fort Lauderdale-based multifamily developer, obtained the loan from City National Bank on April 4 for the six-story development, which will have 142 one- and two-bedroom units.
The Six13, named for its location at 613 NW Third Ave. in the Progresso Village neighborhood, will have a 197-space garage and 5,991 square feet of ground-floor commercial space, including a restaurant.
Like other apartment projects rising in South Florida urban cores, it will have out-of-the-box amenities such as a gated dog park, a residents-only bike-share program, co-working space and a fourth-floor pool with cabanas.
But unlike other new apartment projects, it won’t come with the sometimes cost-prohibitive rents as Affiliated has vowed Thee Six13 will be more attainable.
The developer is considering average rents of $1,500 to $1,700 a month for one bedroom and $1,700 to $1,900 for two bedrooms, said Jeff Burns, CEO and principal of Affiliated.
The prices are all less than the $1,902 average for Fort Lauderdale for March across apartment sizes reported by multifamily information provider Rent Café. While affordable housing is an issue across South Florida, this Fort Lauderdale average was higher than both Miami at $1,702 and West Palm Beach at $1,455.
“A lot of these people who are going to live there have a high income. They are making a good living. It’s just that this is one of the most cost-burdened places in the entire country because our income-to-cost-of-living discrepancy is higher than anywhere else in the country,” Burns said.
The planned rents are good news for residents who work in Fort Lauderdale’s urban core but can’t afford to live there, Burns said.
“We wanted to provide them an opportunity to live close to where they work, close to where they play,” he said.
Exactly how is Affiliated able to offer the cheaper rents at a time of rising land and construction costs? Part of the financing for the $40.3 million project is $7 million in gap funding from the Fort Lauderdale Community Redevelopment Agency.
“Without the CRA funding, we would not be able to offer this kind of a discount to the tenants,” Burns said.
The project also is in an opportunity zone, a state-designated distressed areas where investors can grab tax advantages.
While the opportunity zone doesn’t necessarily translate to lower rents, it was how the developer secured the remaining $14 million in financing.
The so-called OZ program created by the federal Tax Cuts and Jobs Act of 2017 allows investors to defer paying taxes on the capital gains they invest in opportunity zones, while areas that could use the help get the financial boost.
The federal program dictates that investors place their capital gains in a qualified opportunity zone fund.
Affiliated went about the structure differently. It created a qualified opportunity zone business and met individually with investors, who created their own opportunity zone fund to invest in the project, Burns said.
“It was a group of investors we put together, and that includes us,” he said.
The Six13 units are set to be delivered next spring