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Commercial Real Estate
Business Observer Friday, Dec. 27, 2019 1 month ago

Top Deals: Sarasota/Manatee

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Apartment deals continue to flourish in two-county area.
by: Kevin McQuaid Commercial Real Estate Editor

Apartment sales edged out other commercial real estate sectors for overall top transactional activity in Sarasota and Manatee counties for the fourth time in as many years in 2019, as investors clamored to lock in current and future yields amid steady population growth.

Two of the top five deals in the submarket involved multifamily rental projects in 2019, led by a relatively new downtown Sarasota tower that sold to a New York group. An office and a pair of retail sales rounded out the top five deals.

In the absence of a single high-profile sale, however, combined transactional volume for Sarasota and Manatee this year fell by nearly half, to $261.25 million in 2019.

In contrast, 2018’s top deal for the submarket was the sale of the Ritz-Carlton Sarasota resort, which garnered $172.3 million and accounted for a significant portion of the nearly $500 million total. The 2017 total for the top five deals, by comparison, was $266.85 million.

 

1. The DeSota Apartments: $80.3 million

Bluerock Real Estate LLC of New York scored the largest transaction of the year when it purchased the 10-story DeSota Apartments in downtown Sarasota.

The 180-unit project, at 1415 Second St., opened in 2017 and was roughly 90% occupied at the time of Bluerock’s purchase. The company, with more than $4 billion in assets, also is expected to benefit from rents that exceed $2.40 per square foot — well above the market average.

Bluerock’s acquisition from a joint venture between Texas-based Hunt Cos. Inc. and Carter USA, of Atlanta, also represented a record price for a single multifamily asset in Sarasota and ranked among the top prices per unit statewide for the year.

The DeSota debuted in 2017 with units averaging 1,140 square feet.

Bluerock is expected to collect a “going in,” cash-on-cash 5% return from the transaction, according to a release regarding the sale.

In addition to its project in Sarasota, Bluerock also owns apartment projects in Florida in Orlando, Clearwater, Jacksonville and Davenport. In all, the company controls more than 26,000 apartment units nationwide.

 

2. The Green at Lakewood Ranch: $46.35 million

North American Development Group of Toronto acquired The Green at Lakewood Ranch from its developer, Tavistock Development or Orlando, shortly after the project reached substantial completion at the start of 2019.

The 525,000-square-foot retail hub, which is anchored by specialty grocer Earth Fare, restaurant Irish 31 and LA Fitness, is a 22-acre parcel that is part of the larger Collaboration Opportunities for Research and Exploration business park being developed by Lakewood Ranch master developer Schroeder-Manatee Ranch Inc.

In acquiring the property, North American Development says it is a “market dominant community shopping center located at the epicenter of the nation’s second fastest-growing community.” In all, Lakewood Ranch contains some 31,000 acres.

North American Development in Florida owns more than two dozen retail and multifamily rental properties, including the Jacaranda Commons shopping center in Venice and the former Seminole Mall, now called the Seminole City Center, in Tampa.

In all, North American Development has built or bought more than 250 shopping center in the U.S. and Canada containing more than 35 million square feet, according to the company’s website. Its portfolio is valued in excess of $5 billion.

 

3. Gateway Professional Centre: $45.2 million

Boston-based Taurus Investment Holdings bought the four-building Gateway Professional Centre in Sarasota for $45.2 million, a 22% premium from when the office asset last traded in May 2015.

Taurus Investment acquired the 246,931-square-foot property, at 301-551 N. Cattlemen Road, from Bonita Springs-based TerraCap Management LLC.

The collection of three-story office buildings near Interstate 75 was 95.1% occupied at the time of the sale, to homebuilders Taylor Morrison and London Bay Homes and financial services firm Jackson Hewitt, among others.

The 35-acre development was completed in 1999.

Formed in 1976, Taurus Investment has acquired more than 40 million square feet of space valued in excess of $6.5 billion over the course of its four-decade history.

 

4. and 5. (tie) Lakes at North Port and Summer Cove Apartments: $43 million

Both the Lakes at North Port and Summer Cove deals are striking because they involve vintage apartment complexes that investors believe fill a price-point niche in a market crowded with new entrants.

Lakes at North Port, for instance, was completed in 2000; the Summer Cove project in Sarasota in 1997.

Both multifamily rental communities were developed as three-story, garden-style projects and both also are smaller than today’s standard: Lakes at North Port contains 312 units, whereas Summer Cove has just 224.

But as demand has exceeded supply in Sarasota County, each complex’s rents have moved upward to reflect the economic momentum. Rental rates in Lakes at North Port range from $1,075 monthly to $1,620 per month; rents at Summer Cove range from $1,210 per month to $1,660 monthly.

The 1015 Ohana Way project, in North Port, was acquired by CEAI Lakes at North Port, a Kansas company with investors domiciled in Brazil, according to state records.

Summer Cove, at 7887 Lockwood Ridge Road in Sarasota, was purchased by Sarasota-based Insula Apartment Management LLC.

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