Strong Occupancy Rates For Sarasota Apartments
An Important Note for 2023 Class A Unitholders: If you were a holder of Belpointe PREP, LLC’s (“Belpointe OZ’s”) (NYSE American: “OZ”) Class A units in 2023, you can now access your 2023 Schedule K-1 on our tax package support website: located here.
In our view the cyclicality of real estate is likely to favor multifamily housing developers for the balance of 2024 and into 2025 that operate in markets where strong employment and migration growth is evident and there is demand for premium, full-featured apartments. However, the media and much of the traditional real estate investment community seems to have soured on the sector over the past 16 months as the Federal Reserve raised interest rates 11 times.
We concur with the view that certain real estate subsectors are likely to face long-term structural challenges. For example the corporate office sector continues to experience higher vacancy rates in part as a result of companies have implemented remote and hybrid work options post-pandemic. Retail malls are also likely to continue to face headwinds against the secular trend of consumers opting for more e-commerce shopping experiences. However, it is our view that multifamily real estate stocks trading at attractive valuations remain a viable investment alternative, as we continue to see market conditions for upscale occupancy remain relatively strong in some of the most dynamic and growing metro areas.
We also think it is important to note that not all commercial retail space should be lumped together. While shopping malls have struggled, neighborhood-based retail, including retail located within or near full-featured multifamily residential projects in densely populated urban settings, has proven resilient. In our opinion, this is in large part due to the appeal of having essential services, restaurants, bars, fitness clubs, salons, wellness centers, and retail banking either on site or within walking distance.
We at Belpointe OZ (NYSE American: “OZ”) hold the view that now is an opportune time to deliver new Class A multifamily communities to the right markets, and, with great anticipation, we are currently planning to open the doors of our new Aster & Links development to tenants later in May 2024. Aster & Links is located in downtown Sarasota, Florida, in what we believe is a highly attractive Opportunity Zone, situated in the heart of the city, adjacent to waterfront activities and easy access to world famous Siesta Key, St. Armands Circle and the barrier island of Longboat Key with its miles long beaches on the Gulf of Mexico.
Taking an in depth look at The 25 Best Places to Live in the U.S. in 2023-2024, U.S. News & World Report reported that Sarasota “is the second-fastest growing metro area out of 150 places ranked, behind only Myrtle Beach. From 2020 to 2021, Sarasota saw a population increase of 3.55%, due to net migration, according to the U.S. Census Bureau.”
Aster & Links is intended to become a benchmark of elevated living, boasting over 900 parking spaces, including garage parking options, and will offer a comprehensive array of amenities, including a clubroom, fitness room, center courtyard with a heated saltwater pool, and an exceptional selection of rooftop amenities. The rooftop spaces will feature community rooms, private dining areas for exclusive events, outdoor grills, while providing residents with picturesque views and a delightful retreat.
With the first of Aster & Links’ two towers near completion, Belpointe OZ currently expects the second tower to open for new move ins during the second half of 2024. Greystar Real Estate Partners, LLC, one of the largest global property management companies, is managing the new tenant application and move in process.
Investors and future tenants can now preview and pre-lease the available units and floorplans on the updated Aster & Links website, which displays the full-featured, Class A luxury apartment layouts with living spaces from 865 to 2,820 sq. feet, one-bed/one-bath to four-bed/three-and-a-half-bath and a wide array of options to fit the needs and wants of all future tenants. Below is a rendering of a 2,820 sq. foot two-level penthouse that will occupy the topmost floors of the Aster building.
Belpointe OZ (NYSE American: “OZ”) is the only publicly traded partnership that invests in Opportunity Zones. We believe that investors have avoided non-traded REITs due to lack of liquidity and transparency, especially during times of heightened uncertainty in the real estate space. It was noted in a recent article by DIWire that “non-traded real estate investment trusts reported just $317 million of fundraising in January 2024 compared with $4.6 billion in January 2023.”
Additionally, below we’ve included 2 photos of 1000 First Avenue North in St. Petersburg, Florida, another property in Belpointe OZ’s portfolio that is roughly 35% complete.
1000 First is being developed into a 15-story high-rise building named “Viv.” Viv will be comprised of two 11-story residential towers above a 4-story parking garage, featuring approximately 269-apartment homes consisting of studio, one-bedroom, two-bedroom and three-bedroom units, with approximately 15,500 square feet of retail space located on the first level.
We currently anticipate amenities will include a clubroom, fitness center, courtyard with a swimming pool, shared working space and a leasing office. 1000 First is located in the downtown district of St. Petersburg, one mile west of Tampa Bay and the downtown waterfront district and features direct access to downtown amenities such as public parking, restaurants, museums, and cultural sites.
We believe that many people initially invested in OZ’s Class A units because of the attractive tax benefits provided by the Opportunity Zone program, but we want to remind investors that OZ is not a typical public REIT or partnership where stabilized and cash-flowing assets can be contributed day one. Under the Opportunity Zone program, Qualified Opportunity Funds (“QOF”) such as Belpointe OZ must invest in ground-up developments, where cash flow generally takes a number of years to achieve.
In our view investors seeking a discounted real estate investment opportunity should consider exploiting the disparity between the current market price of Belpointe OZ’s (NYSE American: “OZ”) Class A units and its NAV, notwithstanding the tax benefits that Belpointe OZ, as QOF, has to offer. What’s more, investors do not need capital gains to take advantage of the NAV-to-Class A unit price disparity. However, without investing capital gains, investors will not qualify for any of the Opportunity Zone program tax benefits.
Belpointe OZ
255 Glenville Road
Greenwich, CT 06831
T: (203) 883-1944
E: IR@belpointeoz.com
The information in this communication is for illustrative, educational and informational purposes only and is subject to change. Nothing in this communication is or should be construed as an offer to sell or the solicitation of an offer to buy any securities. Offers may only be made by means of a prospectus.
Belpointe PREP, LLC (“Belpointe OZ”) has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Prior to making an investment decision, you should read Belpointe OZ’s prospectus and the other documents that it has filed with the SEC in their entirety, and carefully consider its investment objectives and strategy, risk factors, fees and expenses and any tax consequences that may results from an investment in the offering. Copies of these documents can be obtained free of charge from www.sec.gov or investors.belpointeoz.com or from any broker-dealer participating in the offering.
The information in this communication should not be relied upon as investment or tax advice. You should consult with your own investment and tax advisers concerning the federal, state and local income tax consequences of purchasing, owning or disposing of securities in the offering, and of Belpointe OZ’s election to qualify as a partnership and qualified opportunity fund for federal income tax purposes. There is no guarantee that Belpointe OZ will continue to qualify as a partnership or qualified opportunity fund.
Past performance is not an indicator or a guarantee of future performance. An investment in the offering to which this communication relates involves a high degree of risk, including a complete loss of your investment, and may not be suitable for all investors. The price of Belpointe OZ’s securities will fluctuate in market value and may trade above or below net asset value. Brokerage commissions and expenses will reduce returns.
The offering to which this communication relates is being made on a best-efforts basis on behalf of Belpointe OZ through Emerson Equity, LLC, Member FINRA, SIPC, as managing broker-dealer.
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