Moderno and Gaia launch first phase of $300M single-family home fund for Miami’s urban core

As many developers go vertical with condo projects across South Florida, Moderno Development Group and Gaia Real Estate Holdings are betting on continued demand for single-family homes. 

The two firms launched a $150 million fund called MILAS, which stands for Miami land and single-family, to buy hundreds of homes and townhouses in neighborhoods in and near the city’s urban core, said Doron Broman, founder and CEO of Miami-based Moderno. They also plan a second $150 million phase next year. 

Moderno is primarily a multifamily high-rise and townhouse developer, and New York-based Gaia, led by CEO Danny Fishman, focuses on multifamily and single-family housing. 

“Multifamily [development] is a bit difficult right now,” Broman said, adding that construction costs for new projects aren’t penciling out. “We’re looking for new strategies that our investors want to invest in right now.” 

The developers started purchasing homes and teardowns in February and plan to acquire about 400 within the next year. They will renovate or build new construction and then rent them out for monthly rents in the $4,000 to $7,000 range, Broman said. 

Anastasia Cucu, vice president of acquisitions and development, is leading the venture. 

Gaia opened an office in South Florida as part of the new joint venture with Moderno. Gaia is leasing a 6,000-square-foot office at 8163 Northeast Second Avenue in Miami, a building owned by an affiliate of Moderno.

General partners Moderno and Gaia have raised $50 million in equity for the first phase, plus a $100 million loan/credit line with JLL, Broman said. Of the equity raised, the two general partners have committed 20 percent, or $10 million. Equity investors include high-net worth individuals in tech and family offices, Broman said. 

The venture has two divisions, one handling renovations, and the other new construction. They are paying all cash for the properties, allowing them to close quickly, and will spend about $100,000 per home on renovation costs, according to Broman. 

Moderno and Gaia are focusing on single-family homes and townhouses because little to no new supply exists in the urban core, Broman said. End-user buyers don’t want the hassle and added cost of renovating an older house. The market has slowed, even for single-family: in March, home sales in Miami-Dade County fell 8 percent, year-over-year, to just under 1,000 closings. 

“Demand is increasing but the supply is limited. That’s a good place to be,” he said. “[Single-family homes] are going to be a rare commodity in the future.” 

Moderno is also working on a planned Live Local Act workforce housing project called 500 Art Lofts in Fort Lauderdale. Broman said he expects to get Development Review Committee approval for the project next month, and construction could begin next year.