Daytona, Fla.–A site in Daytona, Fla. that was once destined to sprout a retail center is now on its way to becoming home to Andros Isles Apartments, a 360-residence luxury rental property. Well aware of the recent increase in demand in the apartment market, DeBartolo Development L.L.C. opted to capitalize on the favorable fundamentals and kick off construction of the $39 million project.
In 2006, when the retail market had yet to hit bottom, DeBartolo acquired a 24-acre parcel less than 30 miles from Orlando at the intersection of I-4 and I-95 not for a residential development, but for a shopping center. “We had a department store, a movie theater and a lot of other small users who were very interested,” Edward M. Kobel, president and COO of DeBartolo, tells MHN. But DeBartolo did some extra research and added up the numbers. “The retail part of our financial model returned about $4 million to our company; the apartment model returns $14 million.” The decision made sense as the impact of the housing collapse crippled the retail market. However, the company did not dive right into its multifamily project upon its change of heart. The economic downturn touched every sector of commercial real estate, including multifamily, so DeBartolo decided to sit still until conditions improved–and they have.
At the close of March, the apartment occupancy level in greater Orlando was 90.9 percent, marking a 2.5 percent year-over-year increase, according to ALN Apartment Data Inc. With a HUD 221(d)(4) loan for new construction of market-rate apartments in hand, DeBartolo is positioned to help answer the growing call for luxury rentals in Daytona with Andros Isles. The tropical resort-style apartment community, which will consist of 10 three-story structures with one-, two- and three-bedroom units, will offer a bevy of highly coveted amenities including a cyber lounge with iMac computers, a coffee bar and a game room with flat screen televisions. The list goes on. “We invested a great deal of time and money to create a wilderness preserve on the site,” Kobel says. “You don’t feel like you are at a busy highway intersection; you feel like you are in the woods.”
But it is the busy intersection that will help lure renters to Andros Isles, he notes. “A lot of people work in Orlando. There are north of 40,000 commuters going out of Daytona Beach every day. So at Andros Isles, they will be able to get an apartment that is a little less expensive, a little closer to Orlando, but a better product.”