Marcus & Millichap Sells $88M FL Portfolio

Mallards of Brandywine

The Tampa office of Marcus & Millichap has overseen the sale of the Tripointe Value-Add Portfolio, a six-property, 1,010-unit Florida multifamily portfolio. The sale price was $88.4 million, or $87,524 per unit.

The portfolio of six well-located Central and North Florida properties attracted more than 500 registered buyers and drew 60 offers. But the process of marketing the portfolio required surmounting significant hurdles.

“The scattered site component of the portfolio did pose a challenge in terms of whether we’d find a portfolio buyer interested in purchasing in cities spread across the state, and whether they’d be interested in a portfolio featuring secondary and tertiary markets,” Michael Donaldson, senior vice president investments and senior director, national multi-housing group, told MHN.

Educational process

“But it was our job to educate buyers as to why they’d want to purchase in these markets. What we ultimately did to overcome those obstacles was take the portfolio out to market both individually and as a portfolio. That way we would be able to tap into a significant buyer pool, where we might find buyers interested in one, two or three properties, but target those interested in the portfolio as well.

“Not only did we do that, but we identified [for buyers] significant upside for each single property. We were able to identify the ability to raise the rent per unit by $175 on average, following upgrades. That coupled with educating buyers on the macroeconomic drivers of each of the submarkets, and some of the positive developments taking place, and that these were Class B or better locations within their respective submarkets, led to success.”

Through Marcus & Millichap’s national marketing platform, Donaldson and colleague Nicholas Meoli, senior vice president investments, were able to market the property through the company’s proprietary data base, generating the five dozen offers from buyers across the country.

“Buyers are recognizing a longer runway for property in secondary and tertiary markets and are able to realize a higher yield than in some of the primary markets, which is very important in a rising interest rate environment,” Donaldson said.

Strong demographic, market trends

Ultimately a portfolio buyer did close at the targeted price, he added. Donaldson and Meoli procured the Tampa-based limited liability company buyer and represented the seller, an Ohio-based limited liability company.

“Even though most of the assets are in secondary locations, investors were attracted . . . to the strong demographic and market trends occurring in each submarket, as well as the ability to renovate the communities in order to achieve rent premiums approaching $200 per unit per month,” Meoli said.

“Given the rising interest rate environment with tremendous capital on the sidelines, we anticipate continued demand for multifamily portfolio opportunities in Florida.”