Barry Sternlicht’s Starwood sells Palm Beach County apartment complex for $108M, amid uptick in multifamily deals

Property is part of $1.6B US portfolio sale

Starwood Sells Palm Beach County Apartments to Brookfield
Starwood Capital Group’s Barry Sternlicht and Brookfield Properties’ Bruce Flatt with 825 Cotton Bay Drive East (Getty, Brookfield Properties, Google Maps)

Brookfield Properties bought a 444-unit apartment complex near West Palm Beach for $107.5 million, marking a continued uptick in South Florida multifamily deals, despite elevated interest rates. 

The purchase is part of New York-based Brookfield’s $1.6 billion purchase of a 7,300-unit portfolio of 23 properties from Miami Beach-based Starwood Capital Group, led by billionaire Barry Sternlicht. The complexes are mainly in Florida and Texas, and also in Arizona, Colorado, Georgia and Utah, records show. 

In the latest sale, Brookfield bought the Turtle Cove complex at 825 Cotton Bay Drive East in unincorporated Palm Beach County from Starwood, according to records and real estate database Vizzda. Brookfield took out a $1.1 billion loan, cross-collateralized with the rest of the 23-property portfolio. The lenders are Citibank, Barclays Bank, Goldman Sachs and JP Morgan Chase Bank. 

Completed in 1986, Turtle Cove consists of 28 two-story apartment buildings and four one-story clubhouse buildings on a 26.7-acre site, Vizzda records show. Starwood paid $61.5 million for the complex in 2016. 

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The complex offers one- and two-bedroom apartments, with monthly rents ranging from $1,680 to $2,365, according to 

Starwood, which has $115 billion in assets under management, has felt the sting from a nationwide multifamily market slowdown. As of May, Starwood Property Trust had the highest delinquency rate of commercial real estate collateralized loan obligations (CRE CLOs) at 13 percent, as a percentage of total debt, according to a report by commercial real estate firm CRED IQ. The report analyzed CRE CLOs issued by the 21 firms most active in the space. 

South Florida multifamily investment sales have picked up this summer, despite economic headwinds. Aside from more expensive financing following the Federal Reserve’s 11 increases of the benchmark interest rate in 2022 and last year, apartment demand has waned and rents have plateaued. Some data sources show rents are dropping.

In other recent deals, Chicago-based Mesirow dropped $89.4 million for the 325-unit Retreat at Sawgrass Village apartment complex at 3001 Northwest 130th Terrace in Sunrise this month. That came on the heels of New York-based Pantzer Properties paying $139.2 million for the 352-unit Point at Lakeside complex at 11481 Northwest 41st Street in Doral. 

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