Central Florida Portfolio Commands $41M

A company related to Asia Capital Real Estate Partners of Ponte Vedra, has acquired a five-property, 735-unit, 619,972-rentable-square-foot multifamily portfolio located in Central Florida from the Focus Group for $41 million.
The Palms at Sand Lake

The Palms at Sand Lake

Orlando, Fla.—A company related to Asia Capital Real Estate Partners of Ponte Vedra, has acquired a five-property, 735-unit, 619,972-rentable-square-foot multifamily portfolio located in Central Florida from the Focus Group for $41 million.

Marcus & Millichap represented both parties in the transaction.

The sale included the 176-unit Palms at Cedar Trace, originally constructed in 1984 and located one mile from the University of South Florida in Tampa; the 212-unit Palms at Sand Lake, originally built in 1987 and located 1.3 miles from USF; The Palms at Ashley Oaks, a 130-unit property built between 1965-1968 and located less than one mile from USF; The Palms at Palisades, 125 units, built in 1981 and located less than one mile from the Brandon Regional Medical Center in Brandon; and the Palms at Cortez, 92 units, built in 1975 and located less 3.4 miles from IMG Academy and less than 10 minutes from State College of Florida.

“The recipient of significant interior and exterior capital improvements since 2011, the properties present the new owner with considerable upside potential,” Frank Carriera, Marcus & Millichap’s first vice president investments in its Tampa office, said. “With household formation continuing at an accelerating rate, it is predicted that vacancies will remain particularly tight in the Tampa Bay Area.”

Marcus & Millichap’s Michael Regan, also a first vice president investments in the firm’s Tampa office, joined Carriera on the transaction.

“The portfolio was highly coveted and the bidding process was very competitive,” Regan said. “With annual leveraged returns in the 12 percent to 14 percent range, it is clear that demand for Class B and Class C assets remains very strong in Central Florida.”

According to Marcus & Millichap’s Tampa Metro Multifamily Market Report for Q1 2016, the area is on track for improvements in key performance measures as development increases. Completions will rise in Tampa Bay this year, while tenant demand will remain strong but dip from last year’s exceptionally lofty level.

The report noted that in 2016, the vacancy rate in the metro will rise 20 basis points to a still-tight 3.6 percent as demand growth will slightly trail additions to stock, and the average rent in Tampa Bay will rise 5.4 percent to $1,068 per month this year after a hefty gain of 7.3 percent in 2015.