Milestone drops $112M for Delray Beach apartment complex, amid flurry of South Florida multifamily deals

Milestone Group bought a 488-unit apartment complex in Delray Beach for $111.6 million, amid a continuing flurry of South Florida multifamily investment sales. 

Milestone bought the Axis Delray Beach at 1495 Spring Harbor Drive from Bainbridge Companies, according to records and real estate database Vizzda. The deal breaks down to $228,770 per unit. 

The complex consists of 36 two-story buildings and three one-story buildings surrounding a lake. They were completed in 1988, 1990 and 2019 on a 57-acre site, Vizzda records show. Axis offers one- to three-bedroom apartments, with monthly rents ranging from $1,905 to $3,415, according to its website. 

Milestone plans a multimillion-dollar capital improvement project on amenities, landscaping and building exteriors, Jason Wise, vice president of acquisitions, said in a news release. 

South Florida’s multifamily market has recorded a string of deals in recent weeks, despite economic headwinds such as elevated interest rates and tighter bank lending. The flurry shows investors still are betting on the tri-county region’s apartment market, which was supercharged over the past four years due to an influx of out-of-state residents, although leasing and rent growth have slowed this year. The deal activity also reveals that investors are rushing to close sales before the end of the second quarter. Axis Delray Beach’s trade closed late last month. 

Generally, the Federal Reserve’s aggressive interest rate hikes and skittish banks have sidelined many investors. Still, some are better prepared to keep buying — namely, firms that have raised capital in discretionary funds and need to deploy it. To get around financing issues, buyers are assuming sellers’ debt or are turning to Freddie Mac and Fannie Mae for more favorable loan terms. 

Milestone did both. The firm assumed Bainbridge’s $61.8 million loan on Axis, boosted it to $92.2 million and transferred it to Freddie Mac, according to records. Bainbridge had paid $102.5 million for Axis Delray Beach in 2017, taking out a $66.1 million loan from New York Community Bank and refinancing it with the same lender for $62.2 million in 2022, records show. 

Bainbridge, based in Wellington, has a multifamily portfolio consisting of 48 properties in Florida, four in each of Maryland and North Carolina, two in Virginia and one in Texas, according to its website. The firm is led by CEO Richard Schechter. 

Milestone, which has offices in Boca Raton, Atlanta and Dallas, is a private multifamily investment firm founded in 2003, according to its website. It has made more than $9 billion of investments since it was founded. Jeffrey Goldberg and Robert Landin are co-managing partners at Milestone. 

In 2021, the firm dropped $107 million for the 505-unit Emerald Palms apartment complex at 12325 Southwest 151st Street in south Miami-Dade County, near Zoo Miami. Records show Milestone still owns the complex. 

In other South Florida deals that closed last month, Chicago-based Mesirow paid $89.4 million for the 325-unit Retreat at Sawgrass Village at  3001 Northwest 130th Terrace in Sunrise, near Sawgrass Mills mall. That came on the heels of New York-based Pantzer Properties buying the 352-unit Point at Lakeside at 11481 Northwest 41st Street in Doral for $139.2 million. 

Also in June, Property Reserve, The Church of Jesus Christ of Latter-day Saints’ commercial real estate investment arm, dropped $133 million for the 315-unit Ellsworth building at 1301 Southwest 80th Terrace in Plantation.