The Real Deal Miami

Pompano apartments fetch $22.5 million

Private investor acquires 300-unit Whispering Isles community

August 28, 2014 02:15PM

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Tal Frydman

Tal Frydman

The Whispering Isles apartment complex in Pompano Beach changed hands for $22.5 million.

A private investor acquired the 300-unit community at 250 West Sample Road, according to a written statement released on Wednesday by Marcus & Millichap, which represented the buyer. The firm did not disclose the buyer’s company name. The complex was originally constructed in 1974 and renovated in 2003.

Whispering Isles L.P. is the seller. The company is tied to Centerline Mortgage Capital of New York.

The complex is comprised of eight two-story buildings with a mix of 179 one-bedroom apartments and 121 two-bedroom units. Amenities include two swimming pools, a fitness center and clubhouse. Marcus & Millichap’s Fort Lauderdale-based first vice president of investments Tal Frydman and senior associates Derek Gibbs and Daniel Cunningham represented the buyer.

With few large multifamily properties on the market in South Florida, “buyers are instead targeting older assets where physical improvements can justify raising rents to a level closer than to those charged for new units,” Frydman said. — Eric Kalis

  • Henry Moseley

    What was the Cap Rate (only information that matters in this story)?

    • Jacob Kahn

      5% or less… I bet

      • Simon-Jacob Dunn

        It has to be less… It’s a safe investment!

      • John-Jacob Peterson

        Yes, around that…

  • Frydman real estate

    Multi-family could be an attractive asset class in the coming months and years. The ability to raise rents over a short duration will play a factor in retaining the value of apartment buildings.

    Interestingly, there is another Frydman – his name is Jacob Frydman – who invests in multi-family properties. He believes that the ability to raise rent will be very important in the next few years. Frydman has a pretty successful track record with this kind of deal, if I’m not mistaken.

    Both Jacob Frydman and the fellow in the article seem to think multi-family is where its at.

    • George Frydman Yolin

      Indeed, but I do like Jacob Frydman’s point more. The real estate market is heading in a steady returns direction…

  • Jacob Kahn

    Henry, I wish I could have known the Cap Rate too. Can’t be more than 5-6% in this market, right?
    Frydman brings up an interesting point, multi-family is becoming attractive again, even in markets like New York or Florida.

    • John-Jacob Peterson

      Jacob, it’s got to be somewhere around 4-5%, I will try to look it up and post soon.

      • George Frydman Yolin

        I believe Jacob Frydman is right, the cap right is 5% at the most.

  • Simon-Jacob Dunn

    I’ve visited this complex a few months ago; I can’t believe it got sold for $22.5. I am not saying it’s now worth it, but when you visit these sites you don’t realize the huge amount of $ they are worth. I guess this Jacob Frydman and Marcus & Millichap know why they are in the real estate business.
    Anyway I have a friend that leaves in that complex and it looks really really nice. I wonder if her rent will go up now with this acquisition.

    • George Frydman Yolin

      I’ve seen this complex advertised for sale in the media only a couple of months ago. I never thought it would get acquired so fast. I guess in these markets you have to move fast if you want to grab the deal.

  • John-Jacob Peterson

    This transaction shows that multi-family apartment complexes are still an attractive investment. You get a cap rate of 4-5% which is not that much, but at least it’s much more than the treasury bonds or CDs or other types of bonds. Of course there are other higher yielding investments than multi-family real estate, but who wants to take the risk and volatility of the stock market in order to get 6-7%. If you think that you can beat the market and get 8-9% than that’s another story, but to be honest even these big players like Marcus & Millichap or Jacob Frydman are not able to beat the market. So that is why we still see these type of transactions on the market, and that is why people still invest in multi-family.

    • George Frydman Yolin

      Jacob, good point. Why would you take the 1% of the CDs and make nothing, or why would you risk so much in order to make 6-7%. 4-5% and the safety of these investment hits the hot spot. And I guess investors like Marcus & Millichap, Jacob Frydman know this.
      The interest rates are soon going to change, they can’t sit at 0-1% forever. I wonder what is going to happen then.

  • George Frydman Yolin

    Does anybody know anything about the neighborhood ? I know it’s close to Boca Raton, but how close is it to the ocean?

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