Boston-Based Investment Firm Acquires Substantial Development Opportunity in Emerging South Florida Market
In a significant real estate transaction highlighting the continued interest in South Miami-Dade's development potential, Boston-based Freehold Capital Management has acquired a fully approved 50-acre development site for $31.6 million. The property, strategically located on the southeast corner of Southwest 344th Street and Southwest 199th Avenue in unincorporated Miami-Dade County, had previously received approval for a 309-unit townhouse development that would have included workforce housing components.
The sellers, Legacy Residential Group and CD Group, had originally planned to develop "Legacy Villas at Palm Drive," a project designed to address the growing demand for housing in the area while incorporating units targeted at households earning approximately 120% of the area median income. Despite having secured all necessary approvals, the Miami-based development partners opted to sell the property after receiving what they described as "a very good offer."
"We could have made the numbers work," explained Tom Cabrerizo, CEO of Legacy Residential Group, emphasizing that the decision to sell wasn't driven by the increasingly challenging economic factors affecting the development industry. "We got a very good offer for the property and decided to sell."
Investment Highlights: Substantial Value Creation in a Short Timeframe
The transaction represents a remarkable return on investment for the sellers, who had acquired the property for just $6.3 million in 2021. In just under four years, Legacy Residential Group and CD Group realized a 400% increase in the property's value, underscoring the rapid appreciation of strategically located development sites in South Miami-Dade.
This value appreciation comes despite the increasingly challenging development environment characterized by elevated interest rates, escalating insurance premiums, and rising construction costs. Industry analysts note that these market pressures, combined with potential tariff policies under the Trump administration, have made development projects increasingly difficult to pencil out financially.
Freehold Capital Management's Expanding Real Estate Portfolio
The acquisition adds to Freehold Capital Management's already substantial real estate holdings. Founded in 2013, the Boston-based investment and development firm has assembled an impressive portfolio that includes over 16,000 acres of land, 500,000 square feet of retail and office space, and approximately 32,000 for-sale and rental residential units (including both completed and in-development properties).
The company, led by Jesse Baker and Thomas "Casey" Tischer Jr., has demonstrated a strategic approach to identifying growth opportunities in emerging markets. This latest acquisition indicates continued confidence in South Miami-Dade's development potential, despite the broader economic challenges facing the real estate industry.
South Miami-Dade's Growing Appeal to Developers
The transaction highlights the increasing attraction of South Miami-Dade for developers seeking viable opportunities in a competitive Florida market. The region, encompassing municipalities like Homestead and Florida City, along with neighborhoods such as Goulds, Leisure City, Naranja, and Princeton, offers a unique combination of advantages for strategic developers:
- Substantial availability of buildable land
- Significantly lower acquisition costs compared to prime Miami neighborhoods
- Proximity to major transportation corridors
- A growing population base seeking affordable housing options
- Supportive regulatory environment for appropriate development
Several other major development initiatives in the area further validate this trend. Aconcagua, under the leadership of Martin Muniz and Horacio Bossi, is pursuing an eight-story, 162-unit apartment building project at the northwest corner of Southwest 248th Street and Southwest 128th Avenue in Princeton. Meanwhile, national homebuilder Lennar has proposed two significant single-family home developments totaling 192 units: Rodan Estates with 138 homes near Goulds, and a 54-home project also in the Goulds area.
Development Partners' Continued Collaboration on Regional Projects
While Legacy Residential Group and CD Group elected to divest this particular development site, the companies continue their collaborative efforts on other significant South Florida projects. Near Miami International Airport, the partnership is proposing an eight-story, 235-unit apartment building at 3685 Northwest 36th Street in unincorporated Miami-Dade County.
The continued collaboration between Legacy Residential and CD Group (Cayon Development, led by Mauricio Cayon) signals ongoing confidence in select development opportunities throughout the region, despite the selective approach to which projects they pursue in the current economic climate.
Insights: South Miami-Dade Development Landscap
Why Are Developers Increasingly Interested in South Miami-Dade?
South Miami-Dade represents one of the last frontiers for large-scale development in Miami-Dade County, offering buildable land at approximately 40-60% lower costs compared to central and northern areas of the county, while still maintaining reasonable proximity to Miami's urban core.
Is Workforce Housing Still Viable in Today's Development Environment?
Despite rising costs, workforce housing remains viable when developers can secure the right combination of land costs, government incentives, and operational efficiencies. Projects incorporating a mix of market-rate and workforce units often achieve the necessary financial balance.
How Significant Is the 400% Return Realized by the Sellers?
This exceptional return highlights both the sellers' timing acumen and the dramatic appreciation in strategically located development sites. While not typical of all land transactions, it demonstrates the potential upside in identifying emerging submarkets before they become widely recognized.
What Impact Will Rising Construction Costs Have on South Miami-Dade Development?
While increasing costs present challenges, South Miami-Dade's lower land acquisition costs provide developers with greater flexibility to absorb higher construction expenses while still maintaining viable project economics.
How Are Successful Developers Navigating Today's Challenging Market Conditions?
Leading developers are demonstrating increased selectivity in project pursuit, focusing on locations with strong fundamentals, building greater contingencies into financial models, and maintaining flexibility to pivot between rental and for-sale products as market conditions dictate.
What Types of Developments Are Likely to Succeed in South Miami-Dade in The Coming Years?
Products that address the persistent housing affordability gap will likely find the strongest market reception, particularly townhomes, garden apartments, and single-family developments positioned at attainable price points for middle-income households.
