Buyers cite growing markets, new construction as reasons for mega purchases
A pair of apartment developments in suburban Tampa and downtown St. Petersburg — one old and the other newly completed — have traded for a combined $230.6 million, a sign that out-of-town investors remain enthusiastic about the Gulf Coast rental market.
In the larger of the two transactions, an affiliate of New York-based NorthEnd Equities acquired the 982-unit Reserve at Brandon apartments — formerly the Park at Siena apartments — for $123 million.
The company bought the 1918 Plantation Key Circle multifamily rental community, comprised of a series of three-story, garden-style apartment buildings and related amenities, from an affiliate of Tampa-based Blue Roc Premier.
Built in 1991, the Reserve at Brandon features Wi-Fi throughout the community, a trio of swimming pools, fitness center and tennis courts, according to Apartments.com. Rental rates range from $794 per month to $1,234 monthly, according to the website.
“Florida has a growing population, and Brandon, especially, is a growth area,” says Charles Herzka, a NorthEnd Equities’ principal.
“This property is in our wheelhouse, so to speak, the kind of project we like to buy,” he adds. “We’ve purchased a few thousand units in Florida over the past several years.”
In addition to the Reserve at Brandon, the company along the Gulf Coast also owns the 338-unit Park Place Apartments in Fort Myers and the 400-unit Hanley Place apartments, in Tampa, according to its website.
Herzka says extensive renovations and landscaping improvements are planned in the wake of the company’s purchase in Brandon.
“We almost always make capital improvements in the wake of a purchase,” he says. “We’re planning in Brandon a lot of landscaping upgrades. We’re going to be spending a lot of money there to make it look nicer. In fact, we plan on transforming the entire look of the property before we’re through.”
Blue Roc recently made headlines for its $50 million acquisition of the 352-unit Victoria Landing apartments in Lakeland, a deal that set a record for a Polk County multifamily rental project.
In downtown St. Petersburg, a Canadian firm bought the Hermitage apartment building for $107.6 million, Pinellas County property records show.
Toronto-based Brass Enterprises Inc. describes the eight-story project as having “unparalleled luxury” with an art gallery in its “posh, contemporary designed lobby” and a “state-of-the-art fitness center, an opulent library, an outdoor kitchen, and a resort-style pool and hot tub.”
The 348-unit project, at 151 Seventh St. South, was completed in 2017 and had been owned by an affiliate of Coral Gables-based Allen Morris Co.
Brass Enterprises also notes “demand for apartments and rent growth will strengthen in the Tampa Bay/St. Petersburg metro as companies and institutions continue to expand their payrolls this year. Employers are expected to add 30,100 new jobs in 2019, an annual gain of 2.2%, nearly as significant as the growth that occurred in 2018.”
Brass Enterprises officials did not return telephone calls for comment on the deal.
Founded in 2008, the company also owns multifamily rental projects in Austin; West Palm Beach; St. Louis; Denver; Phoenix; Tempe, Ariz.; and Toronto, according to its website.