Prolific developer Terra bought sprawling acreage for $52 million in Miami-Dade County's biggest land deal of 2019 with financing help from Aztec Group Inc.

Aztec Group managing directors Jason Shapiro and Sean Harrington in Miami secured a $43 million loan for the acquisition and some of the horizontal development work.

Terra, which has developed high-end condominiums in Miami's Coconut Grove and Miami Beach among other projects, wants to build 1,369 apartments on 70 acres northwest of Hialeah between Interstate 75 and Florida's Turnpike.

The company bought the land northeast of Northwest 170th Street and 97th Avenue on Dec. 9 from Prologis Inc., a San Francisco-based publicly traded real estate investment trust that focuses on industrial real estate.

Financing deals for land acquisition are trickier than others since lenders are cautious bankrolling properties that won't generate immediate income.

"It's always a little more difficult or challenging when you are talking about vacant land for future development. Even though it's happening right away on the development side, in the context of bank financing for something that's not income-producing, there's always an added layer," Shapiro said. "But we need to factor in that you've got a highly experienced and sought-after developer who has done this kind of product on numerous occasions previously with a great track record. That makes things a lot easier to structure a deal."

Bank lender Synovus, based in Columbus, Georgia, issued the three-year, floating- rate loan, which closed on the same day as the acquisition.

"A lot of how this deal was structured on the more aggressive side was a pure function of the previous deal that these two parties did together," Shapiro said.

Florida Community Bank, which Synovus acquired in January 2019, financed other Terra projects.

For Shapiro and Harrington, the transaction posed the challenge of working in a tight time frame of six weeks, shorter than the more traditional eight weeks.

The deal "was a pretty quick one given the structure within the purchase and sale agreement. That was really the only challenge, which is not an atypical one. But we got it done," Shapiro said. "We had to work within the dates specified in the purchase and sale agreement. Synovus as the lender had to assure the borrower that it could close in time relative to the time frame cited in the contract."

Terra's decision to build in northwest Miami-Dade might have come as a surprise some time ago when much of the real estate hype focused on walkable downtowns. But now the location is an obvious choice.

The area is poised for growth with other developers building homes. The American Dream Miami mega-mall and entertainment complex is on tap just to the north.

"It's probably what you would call an up-and-coming neighborhood, although there has been over the last year or so quite a lot of development on the stretch along 97th Avenue coming north from 138th Street," Shapiro said. "Lennar and others have been developing mostly residential on the east side of 97th Avenue in the stretch between 138th Street and 170th Street."

Miami-based Lennar Corp. developed the Satori townhouse and single-family community northeast of Interstate 75 and Miami Lakes Drive in Miami Lakes. West across I-75 in Hialeah, Lennar is working on the AquaBella residential community.

Construction of the mega-mall south of the intersection of Florida's Turnpike and I-75 is expected to start in 2021. The entertainment-heavy retail center will include a ski slope, submarine lake and skating rink. The Miami-Dade County Commission gave Canada-based developer Triple Five Group the necessary zoning change in May 2018. It is set to open in 2025 after several delays.

"Terra's acquisition of this site on the northern stretch kind of puts the book end if you will on the northern stretch of this new development as it leads toward the future development of the American Dream Miami mall," Shapiro said.

Terra's 70 acres was rezoned from industrial to multifamily. Terra plans to build market-rate garden-style apartments in three master-planned subdivisions.

It's a favored product in suburban South Florida where the population is growing but many residents are priced out of buying a home. Much of the region's new development for years focused on luxury condominiums and apartments, leaving pent-up demand for less expensive rentals.

"Solving South Florida's market-rate housing crunch means identifying opportunities for urban infill development as well as land in suburban areas that can be rezoned to accommodate new inventory," David Martin, Terra president, said in a news release. "In this case, we are going to convert a vacant site initially earmarked for industrial development into a residential community that will create much-needed apartment housing minutes away from some of South Florida's largest employers. And we're doing it in a sustainable, resilient way by building within the Urban Development Boundary and on high-lying ground."

Pascual, Perez, Kiliddjian & Associates in Miami will create the master plan and design buildings. Each subdivision will have a clubhouse, pools, gym and other amenities.

JLL managing director Brian Smith represented seller Prologis.

"As one of the year's most significant real estate transactions, this deal represents the high demand for remaining developable land in South Florida," Smith said in a news release. "Given the population growth underway in northwest Miami-Dade, this parcel's highest and best use became residential development, which led to the site's eventual rezoning."

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