Although the largest commercial real estate transaction in Sarasota and Manatee counties in 2016 involved a hotel, multifamily projects were the star asset class in the region.
Three of the top five sales of the year involved apartment communities, in Bradenton and University Park, and traded for a combined $188.55 million — 60% of the total dollar volume of the top five transactions.
By contrast, just one of the top five commercial real estate deals of 2015 involved a multifamily deal. Analysts attribute the interest in apartments to continued job and population growth in the Sarasota and Manatee areas, especially among renters of choice — retiring baby boomers, empty nesters, millennials and other young professionals.
In some cases, new owners are hoping to add value through renovations, while in at least one case the acquisition was aimed at reaping existing yield and garnering future appreciation through the purchase of a relatively new complex.
1. Hyatt Regency Sarasota Hotel: $76 million*
*Connotes actual purchase price
Tampa physician, entrepreneur and philanthropist Kiran Patel led a group in early October that acquired the Sarasota Hyatt Regency hotel. Although the recorded deed listed the price at $57.8 million, it is believed the hotel traded for $76 million when furniture, fixtures, equipment, supplies and goodwill were included. The 294-room lodging property, for years mainland Sarasota's premier hotel and banquet facility, had been owned since May 2007 by giant New York investment firm Blackstone Group.
Patel, the chairman of WellCare of Florida, has been silent on future plans for the Hyatt Regency, which faces stiff competition from a handful of new downtown Sarasota hospitality offerings slated to come online in 2017 and 2018. Patel is no stranger to hotel ownership, however. He also controls the 450-room Wyndham Grand Hotel Beach Resort on Clearwater Beach and lodging properties in Pittsburgh and Tucson, Ariz.
2. ParkCrest Landings Apartments: $75 million
Irvine, Calif.-based Passco Cos. LLC bought ParkCrest Landings as a vehicle for generating yield and to allocate a relatively large amount of investor equity at one time. ParkCrest, a 400-unit complex on 70 acres in Bradenton, was completed in 2015. Passco officials say the 17-building community's location is “irreplaceable.” The company, which owns $3 billion worth of multifamily projects in 16 states, also was drawn to ParkCrest's amenities, which include a 1.5-mile walking trail, kayak launch, children's splash park, proximity to a nature preserve next door and on-site movie theater, on top of typical garden-style complex accoutrements like a swimming pool, clubhouses, tennis and volleyball courts and a fitness center. Additionally, three-quarters of all ParkCrest's units have views either of the water or woods.
3. Tuscany Apartments: $70.55 million
The sale of the 386-unit Tuscany Apartments in University Park marks the second time in as many years the complex has traded hands. In 2015, the 41-acre complex built in 1999 sold for $48.7 million, property records show. Buyer TGM Associates of New York says they were attracted to Tuscany — since renamed TGM University Park — because of the potential for future yield and appreciation, a lack of new construction in the area and because the multifamily community is in a growing area near offices and shopping and other cultural amenities. The New York-based investment firm plans a “very large” capital campaign to modernize units and amenities. The complex was 96.4% occupied at the time of sale. TGM also owns the TGM Palm Aire complex which, like TGM University Park, is located on University Parkway in Sarasota County, less than a mile from Interstate 75 and the University Town Center shopping district.
4. Meridian Distribution Center: $52.5 million
Agellan Commercial Real Estate Investment Trust, of Toronto, bought the Meridian Distribution Center off Clark Road in Sarasota County in part because of its unique refrigerated space and full occupancy. The purchase marked the second in Florida for the REIT, which owns more than 36 properties throughout North America. The company also owns an industrial building in Tampa.
Agellan officials say they were drawn to the 907,237-square-foot property's location, price and its ability to add square footage on nine acres of undeveloped land there. The former Winn-Dixie distribution center had been owned since 2006 by Tampa-based Meridian Development Co., which invested roughly $11 million to upgrade the property over the course of its decade-long ownership and constructed a trio of buildings there.
5. Vista at Palma Sola Apartments: $43 million
BF Management of Los Angeles got well in front of the apartment buying frenzy of 2016 when it purchased the 340-unit Vista at Palma Sola complex, at 3900 W. 75th St., in Bradenton, in January.
The three-story complex, completed in 1991, will likely represent a value-add opportunity for the firm. Rents in the complex, which features one- to three-bedroom units, range from roughly $950 per unit to $1,500 per unit. As part of its acquisition, BF Management has embarked on a capital campaign to improve units and common areas, on-site officials say. The complex, just minutes away from area beaches and retail offerings, features amenities ranging from a standard swimming pool, fitness center and tennis courts to a sand volleyball court, vaulted ceilings and controlled access.