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Market Report
Panhandle Research firm Real Data of Charlotte, N.C., has released its annual studies of apartment leasing, and Tallahassee's apartment vacancy rate as of Sept. 12, the snapshot date, was 9.4 percent, up from 8.1 percent a year ago. While that might suggest weaker demand for apartments, Tallahassee's inventory of apartments actually increased during the year to 20,217. Average rent also climbed to $977 from $955 a year ago.
Real Data said Tallahassee saw a significant increase in development activity the past year, with apartment units under construction and proposed units almost doubling. At present, there are six apartment communities under construction and eight others in the review/approval stage. With that rise in inventory, vacancy rates are anticipated to climb again in 2013.
"Based on levels of absorption over the past two years, we expect supply growth to far exceed demand in 2013," said Osei Okrah, a multifamily housing analyst at Real Data, which publishes market studies for metro areas throughout the Southeast.
The recent flurry of activity is in sharp contrast to 2010, the year that not a single multifamily project was permitted in either Leon County or the city of Tallahassee.
Construction returned in 2011 and picked up momentum in 2012. Besides the projects being built or that have reached completion, adding 912 units, there are another 1,414 apartments approved or under review by the Tallahassee-Leon County Planning Department, and a total of 422 in the proposal stage.
Northeast Florida Tampa-based Landmark Residential has acquired a portfolio of Jacksonville apartment properties for $72.5 million, according to public records. The portfolio includes the following properties:
Steve Lear, a principal with Walchle Lear Multifamily Advisers in Jacksonville Beach, represented the seller, Chicago-based Equity Residential.
"Their business plan is to update their portfolio," Lear said. "They’re a big [real estate investment trust], and their business plan is to update their portfolio in more 24-hour cities, major destination cities, like New York, Dallas, San Francisco, Chicago, cities of that nature. They’re going to those markets, buying newer product and just filtering through some of the existing properties such as these."
In addition to the new acquisitions, Landmark owns four other Jacksonville apartment properties.
National REITs like Equity Residential have been active in Jacksonville, most recently with Memphis-based MAA announcing that it would partner with Hallmark Partners, Inc. and Bristol Development, LLC, on the development of 220 Riverside Apts.
Atlanta-based Cortland Partners, a multifamily acquisition, development and management firm, has purchased a $154 million, five-property multifamily portfolio totaling 1,435 units. The five Class A properties include Watervue in Dallas, Newport on the Lake and Harborview in Houston, and Mirador and Stovall in Jacksonville.
With the purchase, Cortland Partners has increased its portfolio by approximately 20 percent, bringing its total multifamily inventory to more than 10,000 units. Additionally, the purchase is the company’s first investment in Florida.
Cortland financed the portfolio acquisition through an international syndicate of institutional and high net-worth equity investors from Israel, the Netherlands and the U.S. The institutional investors include Phoenix Insurance in Israel and Westplan Investors, a private equity group and partner to Cortland Partners.
Central Florida New York-based developer GDC Properties has started the construction of NORA, a six-story, 246-unit luxury rental development located at 899 North Orange Boulevard in Orlando’s North Quarter. The project is design Baker Barrios Architects and is expected to begin leasing in late 2013.
"Demand for rental apartments in downtown Orlando is surging as young professionals look to reduce their commutes and live in a walkable, 24-hour urban environment," says Adam Ginsburg, co-chairman of GDC Properties. "We look forward to providing hip and environmentally-conscious homes to prospective renters."
Eco-friendly property features include a rooftop photovoltaic system that will contribute towards its LEED certification requirements. The unit mix is comprised of one- and two-bedroom apartments that range in size from 691 to over 1,400 square feet in size. Amenities include a courtyard with a large pool and barbecue grilling areas. There will also be an adjacent 400-space parking garage with access to each of the building’s six floors, as well as bicycle storage. The retail component of the building should include a restaurant, gym and coffee shop.
Demolition and construction on the redevelopment planned for the 25-year-old University Shoppes retail center, which is located across from the University of Central Florida’s main entrance in Orlando, have commenced. Austin, Texas-based American Campus Communities Inc. plans to bring 1,313 student housing beds, 60,000 square feet of new retail space and a 10-level parking structure to Orlando’s Northeast Orange County submarket.
Highpoint Club Apartments, a 43-building, 348-unit multifamily community in Orlando, has traded for $30 million. Sentinel Real Estate Corp. sold the property to Robbins Property Associates. Highpoint Club was built in 1995 and is located within the Waterford Lakes neighborhood in Orlando’s University/East Orange County submarket. Jamie May of Institutional Property Advisors (IPA), a multifamily brokerage division of Marcus & Millichap, represented Sentinel Real Estate Corp.
Bay Area Construction is under way for an apartment development at a South Howard Avenue site that formerly housed Whiskey Park. Developer Post SoHo Square, LLC, plans to build more than 200 apartments at 708 S. Howard Ave. The site also will have restaurants.
Institutional Property Advisors (IPA) has brokered the sale of the 416-unit Flagler Pointe Apts., located near Interstate 275 in St. Petersburg, for $23.2 million. The property was built in 1974, but underwent a complete renovation in 2002. The community is 91 percent occupied. Jamie May of IPA represented the seller, PRG Real Estate Management. The buyer was Merion Realty Partners.
HFF has closed the sale of the 184-unit Palms at Brandon Apts. in Brandon. The HFF Florida multi-housing group represented a private seller in the sale of the property to an affiliate of TRIPOINTE Property Group, an Ohio-based investment group focused on acquiring value-add multi-housing assets. The property sold for $10,825,000, or approximately $59,000 per unit.
Palms at Brandon lies on 11.6 acres near the Westfield Town Center in Brandon, a growing bedroom community of Tampa, Fla. Constructed in the 1970s, the property had been converted to condominiums in 2005, although no units are separately owned
Matt Mitchell, Jaret Turkell and Maurice Habif handled the transaction. Post Properties is developing Post Soho Square Apts., located in the Hyde Park submarket of Tampa. Post Soho Square is planned to consist of 231 apartment units with an average unit size of approximately 880 square feet and approximately 10,556 square feet of retail space. The community is expected to have a total estimated development cost of approximately $39.8 million. The first apartment unit deliveries will occur in the first quarter of 2014.
Southeast Florida The Boca Raton office of Atlanta-headquartered ARA arranged the land sale of 2.42 acres for the development of the 227-unit Midtown Phase II multifamily project. ARA’s South Florida Land Division represented Miami-based American Land Ventures in the sale to Camden Realty Trust. Land Division Vice President Troy Ballard was supported by ARA Principals Avery Klann and Dick Donnellan in marketing the property.
"Midtown Phase II offers Camden an incredible opportunity to build a trophy asset located in one of South Florida’s most coveted locations," noted Troy Ballard, lead broker on the deal. "Midtown Phase II is within walking distance to major employment, high-end shopping, dining and entertainment choices within the 860-acre Plantation Midtown District. This type of location is what every multifamily developer and institutional owner is looking for in today’s development environment."
Midtown Phase II is a 2.42-acre site that is planned for 227 multifamily units, with a height of 12 stories, and a self-contained parking garage. The site is part of a larger tract located in the northwestern quadrant of the Midtown District Town Center. ARA previously sold the existing 236-unit Phase I Midtown 24 apartment complex, built in 2010, for over $290,000 per unit.
ARA also handled the sale of Parrot’s Landing, a 560-unit luxury garden apartment community located in North Lauderdale in Broward County. Klann, Marc deBaptiste and Hampton Beebe represented sellers Behringer-Harvard and Grand Peaks in the transaction. Dedicated Capital Investments was selected as the buyer and purchased the property for $56.3 million.
"The property was built in two phases," noted Marc deBaptiste. "Phase I, with 408 units, was constructed in 1987 and renovated in 2007-2010. Phase II, with 152 units, was constructed in 1997.
"Although Parrot’s Landing has benefited from an $8.4 million interior and exterior renovation program, the buyer will likely be implementing value-add interior enhancements to further boost rents," noted Avery Klann, lead broker on the deal.
Carrfour Supportive Housing, Florida’s largest nonprofit affordable housing developer, is teaming up with Tacolcy Economic Development Corporation and the Florida Housing Finance Corporation to provide much-needed permanent housing for over 200 low-income residents in the City of Miami.
Parkview Gardens, a brand-new affordable housing community located at 1437 NW 61st Street in the heart of Miami-Dade County’s Liberty City neighborhood, consists of 60 garden-style apartment units designated for low-income families and individuals. With preference given to local Liberty City residents and area veterans, the $12 million development provides housing for tenants earning at or below 60 percent of the area’s median income (AMI), with six units set aside for those earning at or below 33 percent of the AMI.
On October 30, 2012, Carrfour celebrated the grand opening of Parkview Gardens during a special reception and ribbon-cutting ceremony attended by Miami Mayor Tomas Regalado, County Commissioner Audrey Edmonson and former County Commissioner Dr. Barbara Carey-Shuler.
"Parkview Gardens is a great example of a project that provides a safe place for people in need of a permanent place to live within the community while also stimulating the local economy," said Stephanie Berman-Eisenberg, president of Carrfour Supportive Housing. "We built this project with the intention of creating a modern, secure and affordable living environment for families while serving as a catalyst for revitalizing one of Miami-Dade’s most distressed neighborhoods."
Parkview Gardens is managed by Crossroads Management, Inc., a property management subsidiary of Carrfour Supportive Housing, with the development of the project producing approximately 160 construction jobs.
The City of Miami provided about $343,000 in HOME funding for the development of Parkview Gardens as well as conveyed several parcels of land on which the project was built. Miami-Dade County provided $1,600,000 in Surtax funding. First Housing and JP Morgan Chase Bank served as funding partners while RBC Capital Markets served as equity provider for the project.
The Altman Cos. has unveiled plans for Altis at Sheridan Village, a 300-unit apartment property on 34 acres in western Pembroke Pines in Broward County. Development lender for the project is BB&T, while the equity partner is Sarofim Realty Advisors.
Altman emphasizes the greenness of the property. Among other things, the design incorporates the creation of 10.5 acres of wetlands, with the planting of native trees and flowering lilies to replace the non-native, invasive Melaleuca trees that now populate the site. Residents will also have the opportunity to grow their own organic vegetables and herbs on 10' x 10' plots at the property, complete with access to a composter.
Altman also recently broke ground at Altis at Coconut Creek, a 270-unit rental development near the Promenade Shopping Center, and is planning a new rental property in Kendall in Miami-Dade County, which will start in December.
A 1.29-acre mixed-use development site at intersection of Coral Way and South Miami Avenue in Miami has traded for $18.5 million. South Miami Ave., LLC, sold the site, which is approved for the development of a 556-unit residential tower, 15,049 square feet of retail space and 38,357 square feet of office space, to Related Group. The site is close to the Mary Brickell Village and Brickell Citi Centre projects as well as I-95 in Miami’s Brickell Financial District. Manny de Zarraga and Jaret Turkell of HFF represented South Miami Ave., LLC.
A portfolio consisting of two art deco-style apartments on Miami Beach’s South Beach has traded for approximately $5 million. A 23-unit apartment building at 1610 Euclid Ave. sold for $2.69 million and a 20-unit apartment building at 1600 Pennsylvania Ave. sold for $2.3 million. Arthur Porosoff of Marcus & Millichap represented the seller, a Miami Beach-based limited liability company, and the buyer, an Italian-based private foreign investor.
Marcus & Millichap Real Estate Investment Services, the nation’s largest real estate investment services firm, also arranged the sale of Park Towers, a 207-unit multifamily property in Miami. The asset commanded a price of $11.6 million, which equates to approximately $56,039 per unit.
Tal Frydman, a vice president investments, and associates Daniel Cunningham and Derek Gibbs, all in Marcus & Millichap’s Fort Lauderdale office, represented the seller, a private firm based in Scottsdale, Ariz. The buyer is a private investor based in Miami.
"Park Towers is a rare 10-story apartment building that will provide the new owner with a huge upside in rents, thanks to major renovations that include a refinished pool, upgraded lobby and offices, and remodeling within the units themselves," Frydman said.
Located at 777 NW 155th Lane in Miami, the 10-story, 198,335-square foot building sits on 5.86 acres. It borders a large canal to the south and is surrounded by other multifamily properties. The property was built in 1973. The asset’s completely remodeled lobby offers access to its elevators, leasing office, first floor units, pool and recreation room, all of which have been remodeled or renovated.
Grant Cardone has purchased five southeast Florida apartment communities in Stuart, Port St. Lucie and Palm Bay through his real estate investment company Pacific Star 5, Inc. The entire portfolio was purchased for $59 million from the Max and Marian Farash Charitable Foundation, totaling 1,076,112 square feet and 1,016 units. At the time of closing, the portfolio averaged 98 percent occupancy.
Capital Markets Multi-Housing Group professionals, Robert Given and Richard Tarquinio of South Florida, Shelton Granade in Orlando, and William Roohan and MarthaHastings in Baltimore, Md., partnered together to market the asset for sale and negotiate the transaction on behalf of the seller.
Grant Cardone is a New York Times best-selling author, star and executive producer of the reality TV show Turnaround King, host of the Cardone Zone radio show and is regularly seen on Fox, Fox Business, and Business Insider and also provides commentary on business, financial and social issues at publications including Huffington Post, Entrepreneur, and Forbes, Inc. He is also a professional real estate investor who has bought and sold over 2,500 units in property markets across the United States including San Diego, Calif.; Austin, Texas; Charlotte, N.C.; and now in Florida.
Southwest Florida Bethesda, Md.–based Beech Street Capital, LLC, closed a $15.2 million Fannie Mae conventional loan used to acquire the 268-unit Meadow Brook Preserve Apts. in Naples from Miami-based Fifteen Group. Mitch Sinberg and Michael Wallace in Beech Street’s Florida offices, originated the transaction. The transaction represents Beech Street’s fourth deal with the borrower, Atlas Real Estate Partners, an entrepreneurial real estate investment firm with a specific focus on multifamily acquisitions in Florida, Texas and Massachusetts.
Fifteen Group purchased the property (then named Turle Creek Apts.) in October 2010 for $12 million from the Florida Housing Finance Corporation, which had acquired it in a foreclosure, and the property has since undergone over $1 million in renovations and is in excellent condition. The borrower plans to complete additional renovations upon acquisition. The property is located in North Naples within Collier County, approximately 11 miles from downtown Naples. Greystar manages the property.
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