What's The Deal? | i5 Wynwood W5 Group and Related JV

What drew you to this property that led you to decide on purchasing it?

 

We started investing in the U.S. as a European family—we're German and we manage our investments through a German family office. We moved to Miami ten years ago, and initially, it was challenging to get into the industry without understanding how it works here. From the beginning, we sought the best partners within the real estate industry, and we are very pleased to have partnered with Related early on, as we have had a great relationship with them so far. We've partnered with Related on this deal because we believe they are one of the best developers in Florida.

 

In 2021, when COVID-19 hit, we jointly found and acquired a piece of land in Wynwood at an attractive basis given the uncertainty that the pandemic posed to real estate investors. However, we saw the inevitable connectivity between Wynwood, Edgewater, and Midtown. That's why we bought the plot, well before the Miami hype started. Our investment thesis is called 'innovative living,' targeting younger demographics and their housing needs. Our target asset classes include co-living (such as i5 Wynwood), multifamily, student housing, build-to-rent single family and micro-apartments. We believed that Wynwood would be an optimal opportunity to introduce a co-living concept to Miami.

 

Were there any unexpected challenges or pivotal lessons you encountered with this deal?

We faced significant challenges with furniture vendors, necessitating a switch to those who could meet our delivery timelines despite global shipping issues, including the Suez Canal blockage. I took part in selecting furniture that was both comfortable and aesthetically pleasing for various spaces such as bedrooms, shared living rooms, common areas, and both indoor and outdoor spaces. In this case, attention to detail was exceptionally important, as each piece had to complement the overall design while meeting the functional needs of our shared living space.

Additionally, finding the right muralist proved to be a complex task. We needed someone whose vision aligned with ours and who could complete the work within a tight schedule due to a limited easement window granted by an adjacent property. The mural was essential for obtaining the certificate of completion, making timely execution critical. Our collaboration with Jing Wei, a Brooklyn based artist, was instrumental in overcoming this hurdle, as she brought in her expertise and network to find the perfect artist who delivered exceptional work within the required timeframe.

What demographic are you aiming to attract with this project?

 

We love young professionals because they have their whole lives ahead of them and so much aspiration. They come to our buildings with their first or second job, highly motivated and eager to engage with the community. We also attract some students due to the lack of student housing in Miami. i5 Wynwood’s co-living value proposition appeals to groups who want to rent an apartment together, like students who often times take an entire four-bedroom apartment and the Miami new-comer who wants to understand the city and meet new people. For me, it’s crucial to create innovative housing solutions for young people. Multifamily living is evolving, and young people want amenities, remote workspaces, and vibrant neighborhoods. It's important to cater to this demographic and provide affordable solutions in an ever-expensive city. This philosophy underpins everything we do.

 

What are the rental terms on leases in the building?

 

We offer 3-24 month leases, providing both a short term and long term solution for our residents depending on their life needs. For 12+ month leases, we offer rooms at ~$1,500 per month with current concessions, which is super affordable for Miami. Tenants have private bedrooms and bathrooms but share the kitchen and living room with two or three others. They have access to luxury amenities in a very desirable neighborhood without breaking the bank. Our building is designed for tenants to spend time with the community and utilize the pool, remote working spaces, lounge, and courtyard. Our tenants are diverse, each with unique stories. I love visiting the building and talking to the tenants to get to know them. Understanding our tenants helps us operate the building in the best possible way.

 

What was the interior design collaboration process like?

 

We collaborated with Arquitectonica, Wolk Design and Related Group on the design of the common areas. I love helping to design our buildings and have done a lot of that in Europe. I asked the Related team to keep me in the loop throughout the process, and they were very open to that. We brought some good ideas from our previous projects, and Related integrated us into the process. As the equity partner, it's not usual to have so much say in something like design, but since we care deeply about it, we were able to make decisions together. I had lots of communication with the design team, and we picked every detail and color of every item together. This property is close to my heart because it reflects our company and our value of good design. It was a really fun process. Everyone who visits the building is impressed by how it looks and is designed, especially considering it's not a huge space, for example. It was a really nice process to go through.

 

Did you have any inspiration for the design process?

 

Inspiration for the design process came from properties we've done in Europe that were modern and had a European flair. Both companies brought many pictures and ideas to the design team, putting together elements we loved and wanted to integrate into the building. We also saw the amazing track record of Arquitectonica and looked at several buildings they were involved in, which influenced our decision to work with them. We communicated with Arquitectonica about our vision for the building, emphasizing that it is meant for young people. We wanted to ensure the design was luxurious and high-class but still vibrant and suitable for a young demographic. It was important to us that the design reflected our tenant's youthful and dynamic lifestyle.

 

What are the future plans for this asset?

 

Time will tell, but we are very happy with the building right now, and I think Related is, too. From the W5 Group side, there is no plan to sell or exit anytime soon. We want to lease up the building and see how Wynwood further develops. Wynwood is still undergoing a lot of construction, and many retailers are moving in, attracting more people. The area is so dynamic that the situation seems to change every two weeks. It's hard to predict our next steps right now.

 

How did you get started in commercial real estate?

 

My family has always been in real estate. My father brought a large European asset manager public about ten years ago. Since I was a little girl, everything revolved around real estate. Although I wasn't very involved, I often did my homework at the office and overheard my father on the phone. He once told me, 'Celine, people will always need a roof over their heads,' which made sense to me even as a child. Over time, I started doing more for our company, even while holding a different job. Eventually, my dad asked if I wanted to become an official employee, given how much time I was dedicating. I agreed, and that's how I formally joined the family business. Being a family business, it means a lot to me, especially with my younger siblings who might join in the future. I want to create something they can be proud of. Working on something you genuinely care about is incredibly fulfilling.

 

What advice can you offer a young professional starting their career in commercial real estate?

 

As a young woman in the industry, I don't come across many women my age and often deal with older men. Rather than feeling insecure, I see being different and taking a unique approach as my superpower. I know what I'm good at and understand the target demographics we're building for because they're my generation. My advice is to find what you're good at and follow that path. Also, having a good mentor is invaluable. This industry, especially in Miami, is full of challenges, and there have been times I wanted to give up. Having someone to motivate and mentor you, and to remind you that it's normal for things to get hard, has been very helpful, especially as someone younger in the industry.