Cushman & Wakefield Brokers $56M IN Sale
Castle Rock, a 740-unit apartment property in South Bend, was acquired by a joint venture of Sinatra & Co. Real Estate, L5 Investments and Odyssey Properties.
Castle Point
A joint venture of Sinatra & Co. Real Estate, L5 Investments and Odyssey Properties Group has acquired Castle Point, a 740-unit apartment community in South Bend, Ind., for $56 million and plans to make at least $6 million in improvements to the property. The transaction was brokered by Cushman & Wakefield.
Pennybacker Credit LLP provided a preferred equity investment through the FNMA Preferred Equity program.
The seller of the 51-acre property was Metonic Real Estate Solutions, which had owned the asset since April 2015, when the firm acquired it from Zidan Management Group for $38.5 million, according to Yardi Matrix data. The current sale was subject to a $44.8 million loan held by Fannie Mae, Yardi Matrix reported.
“Castle Point is an attractive value-add investment opportunity in which we foresee the ability to leverage our management and development expertise to achieve strong revenue growth in the coming years,” Nick Sinatra, president of Sinatra & Co., said in a prepared statement. “The property is well positioned between two thriving demand centers, Notre Dame University and Saint Joseph’s Medical Center, which collectively attract over 14,000 students/residents and employ over 12,000 full-time staff. We have over $6 million dollars earmarked toward improving both the property and the community for current and potential renters over the next 36 months.”
Located at 18011 Cleveland Road, Castle Point is one of the largest competitive-rate apartment communities in South Bend. The property comprises 32 two-story apartment buildings, a 25,000-square-foot freestanding amenity center and clubhouse and 11,000-square-foot maintenance facility. Amenities in the clubhouse include a state-of-the-art fitness center, two basketball courts, three racquetball courts, a fitness studio and weight-training facility. The leasing and management office is also located in the clubhouse along with a clubroom and kitchen. Outdoor amenities include a swimming pool, sundeck, one basketball court, two volleyball courts and a playground.
Built in 1979, Castle Point has a mix of one-bedroom and two-bedroom floorplans and occupancy of about 92 percent. Rents range from $622 to $1,010 with an average of $735, according to Yardi Matrix.
Sinatra & Co. said its plans to implement a value-add program that will include in-unit and common area upgrades with a focus on fitness, athletics and technology.
“We are very pleased to acquire Castle Point with Sinatra & Company and look forward to a relationship leveraging our expertise together,” Michael Flaherty, L5 Investments founder & CEO, said in a prepared statement. “We believe that once this asset experiences the execution of key improvements, it will attract even more tenant interest and raise the bar for apartment product in South Bend.”
The accounting and administrative operations at Castle Point have been transitioned to Sinatra & Co.’s Buffalo, N.Y.,-property management affiliate, Sinatra & Co. Management. Day-to-day leasing activities and property management will remain on-site with existing staff resources.
More Multifamily Communities
All the joint venture partners are focused on multifamily investments, particularly value-add properties. In May 2018, Sinatra & Co., along with joint venture partner Auerbach Funds, acquired Woodland Ridge Apartments, a 304-unit garden-style community in Woodridge, Ill., from Katz & Katz for $28 million, according to Yardi Matrix data. Located at 3421 Foxboro Drive, the property has six buildings spanning 32.5 acres and features one- and two-bedroom units.
Also in May, L5 Investments acquired Montrose Apartment Community in Burien, Wash., a Seattle suburb, for $15.4 million. Constructed in 1963, the community includes seven three-story buildings on nearly three acres in south King County at 220 S. 152nd St. L5 Investments had previously purchased the Raleigh Apartments, a 52-unit apartment community in Burien at 12415 Ambaum Blvd. SW for $8.2 million.
Image courtesy of Sinatra & Co. Real Estate
