2017 Top Deals: Southwest Florida

By: 
Dec. 29, 2017

Unlike the past two years, when flashy sales of upscale mixed-use retail and office projects, luxury resorts and vast land tracts made news in Charlotte, Lee and Collier counties, Southwest Florida in 2017 was all about multifamily rental projects.

All Top Five transactions in the region were comprised of apartments, concentrated in Naples and Fort Myers. By comparison, three of the top deals of 2016 were for multifamily rentals, boosted by increased household formations, in-migration and job growth.

Investors also cited the relative lack of new construction and barriers to entry — especially in Naples - to developing new supply, though several new apartment complexes are now being developed or planned, especially in Lee County.

Interestingly, too, buyers in Southwest Florida appear to be willing to pursue older communities for their value-add potential. The top two apartment purchases, both in Naples, involved older complexes where buyers are planning substantial renovations. Those improvements, in turn, are expected to result in higher rental rates going forward.

And as was the case in 2017 in the Sarasota and Manatee submarket, Southwest Florida in 2017 became a magnet for national multifamily owners hoping to take advantage of job and population growth.

1 Alvista at Laguna Bay: $71.56 million

Axonic Properties LLC of New York, a firm that also owns apartments in St. Petersburg, Tampa and Fort Myers, bought the 426-unit Alvista from Blackstone Real Estate.

The 2608 Fountain View Circle complex, which contains 28 garden-style buildings, was completed in 1990 and renovated in 2015.

Jonathan Shechtman, Axonic's managing principal and the former head of an investment firm that specialized in buying residential properties in Naples, says he believes there is “considerable demand” for rental product in the Collier County city.

2 Advenir at Aventine: $67 million

Advenir Inc., which also bought the Advenir at Gateway Lakes community in Sarasota County in 2017, spent roughly the same amount, on a per unit basis, to buy the Aventine at Naples apartments last summer.

The 350-unit community, which had been owned for the past four years by Baltimore-based Continental Realty Corp., was completed in 2002.

Advenir, whose portfolio of multifamily rentals is valued in excess of $2.3 billion, is planning an extensive lighting renovation at the complex, which will be financed in part by Freddie Mac's “Green Rewards Program.”

The 9300 Marino Circle property was 89% occupied at the time of the Advenir purchase.

It features an array of amenities on site, including a swimming pool and spa, lighted tennis court, dog park and internet cafe.

3Amberton Luxury Townhomes: $67 million

The Embassy Group, of Airmont, N.Y., made the Amberton Luxury Townhomes in Naples its first Florida acquisition in September, records show.

The 306-unit rental complex, at 8067 Dream Catcher Circle, was 92% occupied at the time of Embassy's purchase.

Embassy bought the 29-acre complex from Amzak Capital Management, a Boca Raton firm that had owned it since its completion in 2007.

Embassy, which focuses on Class B rental projects because they tend to offer attractive potential returns and stable occupancy, also owns property in North Carolina, Indiana, Tennessee, Georgia and Alabama, according to its website.

4 Sienna at Vista Lake: $66 million

A partnership between Los Angeles-based TruAmerica Multifamily and an investment firm controlled by Dell Computer founder Michael Dell's family bought the Sienna at Vista Lake apartments in August.

The 640-unit complex at 3701 Winkler Ave., in Fort Myers, was originally built as two separate multifamily communities on 35 acres but was combined in 2010.

In all, Sienna contains 32 garden-style apartment buildings. Amenities include a pair of clubhouses and swimming pools, jogging trails, fitness centers and basketball courts.

TruAmerica and MSD Capital are planning roughly $6 million in improvements to the complex's units' lighting, appliances, fixtures, countertops and cabinets through 2020.

TruAmerica, which acquired the complex from Starwood Capital, believes the Fort Myers rental market has “momentum” that will provide future appreciation.

Formed in 2013, TruAmerica is today one of the nation's largest apartment owners, with a portfolio of 32,000 units in the U.S. valued at $6.7 billion.

5 Springs at Estero: $54.97

Passco Cos. acquired the Springs at Estero from developer Continental Properties Co. of Wisconsin in May, and has since rebranded it Longitude 81.

The 260-unit complex, completed at 11221 Everblades Parkway in 2016, sits on 18 acres.

Passco Vice President of Acquisitions Colin Gillis says the company was drawn to the Estero community because of Lee County's growth. Of the 50 markets nationwide that Passco tracks for residential growth, Lee is among the hottest in the U.S.

The purchase marks the second time in as many years that Passco has decided to invest heavily in a Gulf Coast multifamily rental property.

In 2016, the Irvine, Calif.-based firm spent $75 million to buy the ParkCrest Landings apartments in Bradenton.

Gillis says the company sought that 400-unit complex, on 70 acres, because it is located adjacent to a nature preserve and because it had a raft of unique amenities, including a kayak launch, 1.5-mile walking trail and on-site movie theater.

The 17-building complex, at 5725 First Ave. E., was completed in 2015.

In all, Passco owns more than $3 billion worth of apartments nationwide.