Dallas multifamily firm pays $127M for Jupiter apartments

Class B complex sold for more than $354K per unit

Miami /
Apr.April 04, 2022 01:30 PM

From left: Northland’s founder and chairman Lawrence Gottesdiener; president and COO Suzanne Abair; and CEO Matthew Gottesdiener; S2 Capital’s founder and CEO Scott Everett; Jupiter Isle apartment complex at 6705 Mallard Cove Road in Jupiter (Jupiter Isle, S2 Capital, Northland)

Dallas-based multifamily firm S2 Capital bought an apartment complex near Jupiter for $127 million, marking continued investor appetite for rentals in South Florida’s robust market.

Northland, a Newton, Massachusetts-based real estate private equity firm, sold the 359-unit garden-style complex called Jupiter Isle at 6705 Mallard Cove Road, records show. The buyer took out a $103.3 million loan from an affiliate of Blackstone Real Estate Debt Strategies. BREDS is the residential mortgage investment arm of Blackstone, according to Blackstone’s website.

Nathan Stone and Brad Mason of Berkadia secured the financing for S2. Jaret Turkell and Roberto Pesant, also of Berkadia, represented Northland in the deal.

Northland had paid $56 million for the apartments in 2017, which means it rose in value by 127 percent. The sale deal breaks down to $353,760 per unit.

The two-story Jupiter Isle complex is a Class B property built in 1984 on 30 acres, according to an S2 news release about the purchase. S2 bought the property through its S2 Multifamily Value-Add Fund 1.

Jupiter Isle offers one- and two-bedroom apartments, ranging from $1,930 to $2,820 in monthly rent, according to Apartments.com.

S2 Capital, led by Scott Everett, plans more than $5 million in capital improvements over the next two years, including exterior painting, balcony repairs, and renovations to the gym, common areas and leasing center, according to the release. Improvements to unit interiors will include new floors and ceramic tile showers.

Founded in 2012, S2 focuses on value-add investments, meaning it purchases rental complexes and then upgrades them, allowing an increase in value. It has purchased about 42,000 units and put in over $400 million in upgrades and renovations, according to the release.

Northland owns, builds and manages multifamily communities, with its portfolio spanning 26,000 units and $3 billion worth of development in the pipeline, according to its website. It was founded by Chairman Lawrence Gottesdiener, and Matthew Gottesdiener is CEO.

The South Florida multifamily market has benefited from high demand created by population influx. This has pushed up rents to rates that have become unaffordable for mid-income earners, and also has created investment appetite.

In October, Morgan Properties bought the Windward at the Villages at 1441 Brandywine Road, The Royal St. George at 1651 Brandywine Road, and Village Place at 2111 Brandywine Road, all in West Palm Beach, for a combined $132.5 million. Northland was the seller.

Social media personality and motivational speaker Grant Cardone made his latest multifamily purchase in March, paying more than $100 million for the Waterline Miami River complex at 1001 Northwest 7th Street in Miami, along the Miami River.

In a record deal for South Florida single-asset purchases, Harbor Group International and three investment partners paid more than $450 million for the ParkLine Miami apartment towers at Brightline’s downtown Miami station in March.





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