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Although apartment transactions once again outpaced other commercial real estate sectors in the Sarasota and Manatee counties’ submarket in 2020, a trio of other asset types — lodging, senior housing and office and industrial “flex” space — prevented multifamily housing deals from dominating the Top Five as they have since 2016.
Last year, by contrast, four of the five largest transactions involved traditional multifamily rental properties. This year, just two such trades cracked the Top Five.
Combined, the five largest transactions totaled $319.66 million in deal volume, a gain of 22.3% from a year ago, reflecting growing investor interest in tertiary markets like Sarasota, Bradenton and Lakewood Ranch. The increase also points to strategic demand for select assets that have maintained healthy cash flow and consumer interest.
Interestingly, too, the apartment deals that did make the Top Five this year both involved suburban properties, a reversal of top deals in previous years that focused more on downtown locations.
1). The Loop at 2800: $73 million
New York-based private equity company Praedium Group kicked off 2020 in January with what would turn out to be the largest commercial transaction in the two-county submarket.
The purchase of the 324-unit Loop at 2800 apartments — formerly the Oasis at Sarasota — marked Praedium’s first purchase in the submarket, though the company also has holdings throughout Florida in Jacksonville, Orlando, Boca Raton and Pompano Beach, according to its website.
The complex, a series of a dozen three-story buildings on 25.5 acres in the University Park section of Manatee County, was completed in 2019. Praedium acquired the community from Picerne Real Estate Group of Altamonte Springs, property records indicate.
The Loop at 2800, where rental rates currently range from $1,425 monthly to $2,835 per month, was 96.3% occupied as of mid-December. Unit sizes range from 802 square feet to 1,319 square feet, according to the complex’s website.
Complex amenities include a coffee bar, grilling stations, fitness center and a “beach entry salt water” swimming pool, Loop at 2800’s website states.
In buying the complex, Praedium notes that the Sarasota area has grown in population 2.7 times greater than the national average over the past five years.
Praedium, which was formed in 1994, owns more than 83,000 multifamily rental units and 47 million square feet of commercial space, its website notes. Since its inception, the company has participated in more than 370 transactions involving in excess of $12 billion in capital.
2). Zota Beach Resort: $67 million
The transaction involving the Zota Beach Resort on Longboat Key didn’t involve a sale so much as a re-capitalization. In March, owner Ocean Properties Hotels & Resorts bought out its long-time financial partner in the project, valuing the property at $67 million for the sake of the deal.
Los Angeles-based Rockwood Capital invested in Zota and about two dozen other Ocean Properties’ hotels in six states in 2007, just as the last decade’s recession was beginning to erode property values and income streams.
In addition to Zota, at 4711 Gulf of Mexico Drive, Rockwood also provided capital to Ocean Properties’ Lido Beach Resort in Sarasota and the Resort at the Longboat Key Club, on Longboat Key.
Delray Beach-based Ocean Properties invested roughly $24 million to add an 84-room tower to the 103 existing rooms at the former Longboat Key Hilton in 2017.
The company acquired the then-Hilton flagged hotel for $14.4 million in 2007, records indicate.
In October 2019, the resort was listed among Conde Nast Travelers’ prestigious Top 30 Florida resorts as chosen by readers of the magazine.
In all, Ocean Properties controls 125 hospitality properties with more than 19,000 rooms in 15 states, according to its website.
3). Gatewood Corporate Center: $60.5 million
Atlanta-based MDH Partners, in a belief that increased demand for industrial and “flex” space will continue into the future, acquired a six-building project in Lakewood Ranch in September.
Gatewood Corporate Center contains 445,000 square feet and is about 85% committed to some two dozen tenants. Developer Harrod Properties Inc., of Tampa, began work on the combination office and industrial project on 85 acres in 2017.
The project marked the first time that Schroeder-Manatee Ranch Inc., the master developer of the 31,000-acre Lakewood Ranch, had allowed industrial space to be constructed within the ranch.
Last year, commercial real estate industry group NAIOP named Gatewood Corporate Center as the best industrial project in the Tampa Bay area for 2019.
MDH is believed to have purchased the project using capital from a $350 million fund it created in 2019 to acquire industrial properties. Historically, the 15-year-old company has focused its investments in Sun Belt markets like Atlanta, Miami, Phoenix, Jacksonville and Charlotte, N.C.
In all, the company manages about 20 million square feet of space contained in 20 cities. In Orlando, it’s building a 300,000-square-foot industrial project that is expected to be delivered early in 2021.
4). Sage at Palmer Ranch: $60.4 million
Like Loop at 2800, the 257-unit Sage at Palmer Ranch apartments are a relatively late-model vintage — completed in 2014 — and located in the suburbs (though in Sarasota County, not Manatee).
Likewise, buyer Abacus Capital Group is headquartered in New York and its July acquisition marked its first in the Sarasota-Manatee submarket.
In all, Abacus owned four other Florida multifamily at the time of its Sage at Palmer Ranch purchase, according to its website. The company’s portfolio contains 23,000 apartment units valued at $2.5 billion nationwide.
Sage at Palmer Ranch was developed by Stockton, Calif.-based Spanos Corp. Units in the garden-style community measure 639 square feet to 1,315 square feet, while amenities include a cyber café, fitness center, pickleball courts and a swimming pool.
5). Aston Gardens at Pelican Pointe: $58.76 million
Kayne Anderson Real Estate Advisors L.P.’s purchase of the Aston Gardens senior living facility in Venice was part of a six-property portfolio the Boca Raton-based investor acquired from Welltower Inc.
Other Aston Gardens-branded properties in the deal were located in Tampa, Naples, Ruskin and Sun City Center. In all, Kayne Anderson invested about $250 million into the properties, which Welltower had acquired in late 2015 for $277 million.
Senior housing is one of a handful of investment niches that the 36-year-old company specializes in. At the end of 2019, it maintained five offices and oversaw holdings valued at $31 billion.
Companies like Kayne Anderson allocated capital in 2020 to buy senior living properties despite COVID-19 and its negative effect on both occupancies and operating costs.
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