With national homeownership rates in the dumps and a slumping condo market, the one residential asset type that seemed to rule them all in South Florida this year was the rental building.
Developers were launching new mixed-use projects everywhere from south Miami-Dade County to Jupiter, and institutional investors couldn’t seem to keep their hands off multifamily properties.
The Real Deal put together a list detailing South Florida’s five biggest trades this year, based on CoStar Group data. Check them out below.
Solero at Plantation
#1 Solero at Plantation: $122.7M
The priciest sale of a rental community to close this year took place not in downtown Miami, but in the sprawling suburbia of Broward County.
A joint venture between AEW Capital Management and Grand Peaks Properties dropped $122.7 million on the Solero at Plantation complex, which houses 481 apartments and townhomes at 13500 Northwest Third Street.
The January closing brought nearly $255,095 per unit for the seller, Invesco Advisers, and marked the first deal to break $100 million in South Florida this year.
CBRE’s Robert Given, who helped broker the deal, said at the time that Solero was ripe for a renovation program — a move that would likely help boost asking rents in the complex.
Invesco had purchased Solero right after the community was built in 2010 for $104.7 million in cash. The acquisition amounted to a large bet on the multifamily market at a time when the real estate industry was still in the midst of a national recession.
With an $18 million premium over what it paid six years ago, Invesco’s bet appears to have paid off.
Biscayne at Portofino complex
#2 Aliro: $117M
Not far behind in the No. 2 spot was private equity giant Blackstone Group’s purchase of a prominently located apartment complex in North Miami, across the street from where Turnberry Associates and LeFrak are planning a massive $4 billion mixed-use project.
In July, the firm paid $117 million for the Portofino at Biscayne, a sprawling mid-rise apartment community with 871 units that was built in 1974. The seller was Stellar Management, which made roughly $135,000 per unit from the deal. The change of ownership also came with a new name for the community, which is now called Aliro.
Stellar had paid $48.13 million for the complex in 2002, according to county records.
For Blackstone, the purchase was another sign of confidence in the country’s rental market, in which it’s heavily invested. The company is particularly bullish in Miami, as detailed by Blackstone’s head of real estate Jonathan Gray at a recent panel — though he also admitted he had a “favorable bias” for the city.
The company financed its purchase with a $90 million loan from Wells Fargo.
Edge at Flagler Village
#3 Edge at Flagler Village: $114.39M
In another sign that Fort Lauderdale’s hip Flagler Village neighborhood is in the midst of a boom, financial firm TIAA bought a newly built apartment complex from the Morgan Group in April for $114.39 million.
The all-cash deal worked out to roughly $344,578 per unit for the 332-unit complex, which boasts rental rates that rival apartments in Miami at $1,730 per month for a studio. It was also the second big-ticket purchase in the neighborhood for TIAA, which had bought Related Group’s Manor at Flagler Village apartment community for nearly $149 million just a year prior.
With a large, institutional investor like TIAA doubling down on properties in Flagler Village, market watchers viewed it as a confirmation that the neighborhood was on the verge of seeing a Wynwood-esque boom in values.
The deal didn’t mark the end of Morgan’s involvement in Flagler Village: later on in the year, the Texas-based developer started construction on another rental community called Morgan on 3rd Avenue.
The Las Ventanas at Boynton Beach apartments (Inset: Pollack Shores Co-Founders Marc Pollack and Steven Shores)
#4 Las Ventanas: $109.31M
Just in time for this year’s holiday season, the Pollack Shores Investment Group closed a December deal to buy a Boynton Beach apartment community for $109.31 million.
Known as the Las Ventanas apartments, the community houses a mix of 494 apartments and townhomes, along with some ground-floor retail space.
The seller was a partnership between Epoch Properties and the Prudential Insurance Company, which made roughly $221,275 per unit for the deal. Epoch had built Las Ventanas in 2009 and brought it up to 92 percent occupancy by the time of the sale.
Rents at the community average $1,802 — far above the market average of $1,395, according to data from the CoStar Group.
The deal was another sign of confidence in Florida’s multifamily market from Pollack, which keeps a considerable chunk of its $1.3 billion portfolio in the state. It financed its latest purchase with a $70 million loan from Prudential.
University Park, University View and University Square
#5 University Park: $105.25M
While all the above deals were for a single property, Investcorp wanted a little more bang for its $105 million bucks. In January, the international investment group bought three student housing complexes in Boca Raton for that sum, growing its South Florida rental portfolio by a combined 304 units. The sale broke down to $346,217 per unit.
Included in the deal: University Park, a recently built 11-acre complex that fetched the lion’s share of the sale at $70 million; University View, a townhome community with 55 units that was built in 2009; and University Square, an older 90-unit complex that was built in 1969.
The trio was sold by Rosemurgy Properties and its partners Giles Capital Partners and Lewis Rental Properties.
Student housing has become big business in South Florida, as developers and investors both bank on the steady demand provided by nearby colleges. Nationwide enrollment numbers have boomed in recent years, while the stock of student housing has remained relatively restricted.