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Business Observer Friday, Aug. 25, 2017 1 year ago

Southwest Florida complexes trade for $137.6 million

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A pair of Southwest Florida apartment complexes have sold for a combined $137.6 million, a sign that investors' fever for rental projects remains high in Lee and Collier counties.
by: Kevin McQuaid Commercial Real Estate Editor

A pair of Southwest Florida apartment complexes have sold for a combined $137.6 million, a sign that investors' fever for rental projects remains high in Lee and Collier counties.

In one deal, Los Angeles-based TruAmerica Multifamily and MSD Capital L.P. — an investment vehicle for Dell Computer founder Michael Dell's family — purchased the Sienna at Vista Lake in Fort Myers for $66 million.

The 640-unit complex, which was constructed as two separate complexes in 1990 but combined 20 years later, contains 32 garden-style apartment buildings.

The 3701 Winkler Ave. community features a pair of clubhouses, as well as amenities like swimming pools, fitness centers, basketball and tennis courts and jogging trails.

TruAmerica and MSD are expected to invest about $6 million into upgrading the Sienna at Vista Lake, including new unit lighting, appliances, fixtures, countertops, cabinet fronts and washers and dryers, over the next three years.

Matthew Ferrari, TruAmerica's director of acquisitions for the East Coast of the U.S., says the 35-acre property — purchased from Starwood Capital with financing from a Freddie Mac Green Up loan arranged by commercial brokerage firm Holliday Fenoglio Fowler — was acquired for less than replacement cost.

“There's a lot of momentum in that market,” Ferrari says. “And though Sienna is an older product, it has really good bones. We think after we've renovated people will walk into much more modern-looking apartments.”

Sienna at Vista Lake marks the fourth purchase by the TruAmerica and MSD team, of apartments in Florida, California, Maryland and Nevada. TruAmerica, formed in 2013, today owns more than 32,000 units nationwide valued at $6.7 billion, and in excess of 1,600 in Florida.

In May, the company bought two Orlando complexes for $98 million.

Ferrari says the company hopes to own as many as 5,000 apartment units in Florida by 2020.

“Florida has been our primary focus this year,” he says.

In the second major deal to close in recent weeks, a New York-based investment firm bought the Alvista at Laguna Bay apartments, in Naples, for $71.6 million.

Axonic Properties LLC, which also owns rental communities in St. Petersburg, Tampa and Fort Myers, bought the 426-unit Naples complex at 2608 Fountain View Circle from an affiliate of Blackstone Real Estate, according to Collier County property records.

The 27-year-old community, which was substantially renovated in 2015, features 28 garden-style buildings and a host of amenities.

“We saw it as an opportunity to buy a lot of apartments at one time in the heart of Naples, where we believe there's considerable demand for rentals,” says Jonathan Shechtman, Axonic's managing principal.

Before joining Axonic in New York, Shechtman ran Florida Rental Specialists LLC, a Naples-based firm that invested in single-family homes in Southwest Florida.

In the first half of 2017, apartment investments led all asset classes in Charlotte, Collier, Lee and Monroe counties, according to a new report from commercial brokerage CBRE Group.

Of the roughly $1.57 billion spent on commercial properties in the first six months of the year, 27% — or $425 million — went toward buying apartment units, CBRE says.

By comparison, during that same period, investors spent $391 million — the next most popular property type — in those four counties to buy retail properties.

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