Preferred Apartment Communities buys Altis Wiregrass Ranch two years after making loan for 392-unit complex, despite coronavirus pandemic
An Atlanta-based real estate investment trust has acquired a Wesley Chapel apartment project completed in 2018 for an estimated $80 million.
Preferred Apartment Communities Inc. says the 392-unit Altis Wiregrass Ranch apartment project fits its overall business strategy.
“The acquisition demonstrates our commitment to our strategy of selectively adding newly constructed, Class A multifamily communities to our portfolio, which we believe will translate into sustainable and growing cash flows,” says Jeff Sherman, president of Preferred Apartment’s multifamily division.
Preferred Apartments became involved with the Pasco County community when it loaned the project’s Boca Raton-based developer capital to construct the four-story complex at 28878 Golden Vista Blvd.
The company did not acquire the gated complex traditionally in late March, but bought partnership interests in a related company, Altis Wiregrass Capital LLC. John Isakson, the company’s CFO, did not respond to a request for comment on the structure.
“Altis Wiregrass Capital conveys 100% of its membership interests … to PAC Carveout LLC, which will convey the property to PAC Wiregrass Ranch LLC,” Preferred Apartment explains in county records associated with the sale.
In structuring the purchase that way, which is permitted by Florida law, Preferred Apartment was able to avoid payment of hundreds of thousands of dollars in documentary stamp taxes to the county. Instead, its bill came to 70 cents.
Sherman notes, as well, that Preferred Apartments will obtain a 10-year, 2,9% fixed-rate loan from Nationwide. The first mortgage debt, which will amortize on a 30-year schedule and carry “no loan guarantees,” is expected to close by the end of June.
“We were able to secure outstanding project-level debt for this property,” Sherman says, in a statement.
While the exact purchase price is unknown, newly built suburban multifamily rental properties in the Tampa Bay area have sold for roughly $200,000 per door. At that amount, Altis Wiregrass would have cost more than $78 million.
Altis Wiregrass’ units rent for $1,273 per month to $2,130 monthly, according to Apartments.com. The community features amenities such as a “resort-style pool” with cabanas; a fitness center; indoor pet spa; and a car detailing area.
The complex is located in the 5,000-acre, master-planned Wiregrass Ranch. Sherman notes a 98,000-square-foot, indoor sports facility and Marriott-flagged hotel are both under construction near Altis Wiregrass.
In buying the complex, Preferred Apartment also seems to be shrugging off concerns about the Covid-19 pandemic, which has greatly impacted Class A multifamily rental landlords nationwide.
“Despite the current near-term environment, our financial involvement in the development of this property since inception gives us a deep understanding of the positive long-term attributes of this best-in-class community and the growing market area around it,” Sherman says.
At the close of 2019, Preferred Apartment owned, or had invested in, 123 apartment and student housing projects, retail centers and office buildings in 15 states, primarily in the Southeast.