Market Report

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The Jacksonville office of Atlanta-headquartered ARA, full-service investment advisory brokerage firm in the nation focusing exclusively on the multihousing industry, recently brokered the sale of 224-unit Huntington at Hidden Hills in the desirable East Jacksonville submarket.

The ARA Central and North Florida-based sales team, led by Senior Vice President Matt Wilcox and Principals Kevin Judd and Patrick Dufour represented San Francisco-based McDowell Properties and Georgia-based AREA Properties Partners in the $12,500,000 sale. Jacksonville-based Michaelson Real Estate Group purchased the asset, which was 96 percent occupied at the time of sale.

"Huntington at Hidden Hills is a prime example of the rebound in the Jacksonville multifamily sector. The asset was last purchased from a distressed situation in 2011. The seller turned and stabilized the tenant base and infused necessary deferred capital. The buyer will continue the work with value-add upgrades to the property amenities and unit interiors bringing the performance in-line with the stabilized comp set," commented Matt Wilcox.

Built in 1986, Huntington at Hidden Hills Apartment Homes benefits from an excellent location with superb visibility along Monument Road, with an average daily traffic count of 26,000. The property enjoys convenient accessibility to I-295 and the Arlington Expressway, both located just minutes west, providing a quick route to downtown and "beltway" access to the greater Jacksonville area.

"Jacksonville continued its upward trend in occupancy rates through 2012, and as of 4Q 2012, occupancy was recorded at 92.7 percent, representing a full 2 percent improvement year-over-year and a drastic 3.7 percent increase over two years," added Wilcox.

The brokerage team representing the seller, Colony Capital, LLC, included John W. Stone, CCIM, Principal and Managing Director of Multifamily Investment Services for Colliers International Tampa Bay; Greg Wilson, Director of Multifamily Investment Services for Colliers International Central Florida; George Pjevach, Director of Multifamily Investment Services for Colliers International Central Florida; and Kitty Wallace, Executive Vice President of Colliers International Los Angeles.

Colliers’ Los Angeles office worked with the Colliers brokers in Tampa Bay and Central Florida to market the property to multifamily buyers specifically interested in the Central Florida market. Through strategic Internet and email marketing campaigns and personal communication, the opportunity was exposed to more than 6,000 contacts resulting in multiple offers.

WK Holdings, a New York-based private capital firm, responded to the marketing campaign and was selected as the purchaser as a result of the seller’s due diligence process. The property sold for $5.3 million, $21,900 per unit or $17.97 per square foot.

In the Pines Apartments brought in multiple offers thanks to its strong position as a value-add property. The buyer will have the ability to increase value by completing needed renovations and repositioning the property with increased rents.

Marcus & Millichap Real Estate Investment Services has announced the sale of Howry Garden, a 16-unit apartment property located in DeLand, according to Richard D. Matricaria, regional manager of the firm’s Tampa office. The asset commanded a sales price of $425,000.

Michael Donaldson and Nicholas Meoli, senior associates in Marcus & Millichap’s Tampa office, had the exclusive listing to market the property on behalf of the local seller, a private investor. Joe LaFleur, senior associate, and John Pullman, associate in the firm’s Orlando office secured the buyer of the property, a private investor from Orlando.

Howry Garden is located in the historical city of DeLand at 312 West Howry Avenue. This 1966-built complex consists of four, two-story buildings situated on .82 acres of land. Each unit is equipped with central heat and air-conditioning and residents have access to an on-site carport for their vehicles. The complex is comprised of 16 two-bedroom and two-bath units at 1,037 rentable square feet.

"Howry Garden was a prime example of another distressed asset obtaining near market level pricing," said Donaldson in a statement. "Even just a year ago, we would have seen substantially lower offers coming in on a short sale like this property."

"With such active buyer demand these days, not only did we obtain a great price per unit for the property, but the buyer also secured new attractive bank financing, which used to be extremely difficult to obtain for distressed assets in the past," concludes Donaldson.

Marcus & Millichap Real Estate Investment Services has announced the sale of Paradise Trail, a 13-unit apartment community located in Clearwater, according to Richard D. Matricaria, regional manager of the firm’s Tampa office. The asset sold for $575,000.

Michael Donaldson, senior multifamily associate in Marcus & Millichap’s Tampa office, had the exclusive listing to market the property on behalf of the seller, a limited liability company. The buyer was represented by Mark Schmitz of Excel Realty of Pinellas County, Inc.

Paradise Trail is located at 1111 Cardova Lane in Clearwater. This two-story apartment community was built in 1972 of concrete block construction and is situated on just over 0.175 acres of land. The unit mix consists of one and two-bedroom units. Several units have views of the intracoastal which is located one quarter of a mile away from the property.

"The sale of Paradise Trail was another example of a multifamily short sale being sold at market pricing," said Donaldson in a statement. "With so few distressed apartment assets being available on market any more, we are continuing to see bank-owned and short sale properties selling at, or very close to, typical market pricing due to substantial demand from investors."

"Paradise Trail was purchased by a non-profit and obtained an excellent price per unit for the Clearwater submarket," concludes Donaldson.

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Beech Street Capital, LLC, announced that it closed a $17.2 million Freddie Mac CME loan for the acquisition of MacArthur Park, a 456-unit apartment complex in Clearwater. Mitch Sinberg and Michael Wallace, senior vice presidents of origination in Beech Street’s Fort Lauderdale office, originated the transaction. The borrower was Robbins Property Associates (RPA). In addition to its ownership interests in apartment communities, RPA currently manages 16 properties totaling 4,000 units, primarily in Florida.

Built in 1975, MacArthur Park is a well-maintained property. The previous owners invested over $1.6 million in capital expenditures since 2008. It offers a unit mix of one-, two-, and three-bedroom apartments. Approximately 35 percent are townhouses, which makes them especially attractive for families. Unit amenities include fully equipped eat-in kitchens, large walk-in closets, linen closets, private patio/balconies, and extra storage.

Marcus & Millichap Real Estate Investment Services has announced the sale of 2317 West Texas Avenue and 1403 South Bay Villa Place, a two-property portfolio totaling eight units located in Tampa, according to Richard D. Matricaria, regional manager of the firm’s Tampa office. The asset sold for $788,000.

Casey Babb, a CCIM and senior multifamily specialist in Marcus & Millichap’s Tampa office, had the exclusive listing to market the property on behalf of the local seller a private investor and the buyer, a limited liability company.

The properties were built in 1926 and consist of two-bedroom/one-bath units averaging just over 1,000 square feet. The West Texas building had received over $200,000 worth of renovations in 2006 in advance of a failed condo conversion and rents today averaged close to $1,200 per month. The incoming buyer is planning to duplicate the renovation on the South Bay Villa building and also add a common area courtyard with lush tropical landscaping and a fountain.

Casey Babb, CCIM brokered the sale on an off-market basis and commented that "...investor demand for well-located apartment assets is at an all-time high right now and we’re seeing record pricing in the marketplace. This property was sold without the benefit of a formal listing and we generated multiple offers after showing it to only a handful of our closest clients. The buyer purchased the building all-cash and closed in under 30 days of contract."

Southeast Florida
Commenting on the latest figures, Loxley McKenzie, Managing Director of Colordarcy, said, "Apartments and condos in Miami are currently in high demand. Colordarcy has seen a surge in inquiries with prices relatively inexpensive for one of the world’s most dynamic cities."

"Only two property markets in the world have managed to outpace Miami for growth. With some way to go before we can say that prices have recovered to the long term average rate of home price inflation, there is almost certainly more growth to come."

Miami condominium sales increased 5.5 percent to 1499 in June which compares to the 1421 sold in June 2012 according to the latest data (Source: Miami Association of Realtors 'Miami Condo Inventory Slightly Rises, Remains Insufficient to Satisfy Demand', June 26, 2013). Colordarcy highlight that Miami apartment and condo prices have now been rising for 19 consecutive months.

Analysts at Colordarcy point out that despite low stock levels, apartments in Miami are available from just $69,000 which makes prices exceptionally low by European standards. This brings potential yields for buy-to-let investors up to the 8 percent mark as rents continue to rise steadily in the city (Source: Rent Jungle, July 2013).

The balance between the cost to rent compared to the cost to buy is tilted in favour of those buying, yet locals are often unable to secure finance to invest leaving foreign investors to benefit from the high monthly rents currently being charged to tenants. It currently costs in the region of $1,642 a month on average to rent a one-bedroom apartment in Miami with two bedroom apartments averaging $2,268 per month. (Source: Rent Jungle, July 2013).

Beech Street utilized its relationship with City National Bank to create a structure that would allow the borrower to refinance their existing debt while providing them with a future funding component and flexible prepayment terms. Once all the units are repurchased the borrower will have options for sale or refinance with a minimal prepayment penalty.

Colonnade Apartments is located in close proximity to Sawgrass Mills Mall, one of the largest enclosed shopping malls in the country and a major tourist destination. It also has excellent access to major highways and the Sawgrass International Business Park. Amenities include a resort-style swimming pool and spa, fitness center, business center, garage parking, lounge, gated access, outdoor gathering/grill areas and a clubhouse.