Tarragon Buys Gables Celebration for $28M

CELEBRATION, FL-Tarragon Realty Investors Inc., a New York-based developer/investor with a growing Florida presence and headed by William S. Friedman, has purchased the 231-unit Gables Celebration apartment community in this Orlando suburb from Gables Residential for $27.5 million, or $119,048 per unit.The Boca Raton, FL-based seller expects to record a first-quarter gain of about $2.5 million, or seven cents per diluted share, says Gables principal Jim Bennett. Occupancy at closing was “above 90%”, he says. Gables sold the asset as part of its “long-term (disposition) strategy” and its desire to “take advantage of the current market” rates, Bennett tells GlobeSt.com.”The company’s strategic objective is to produce total returns through monthly dividends and share price changes that exceed the NAREIT apartment sector index,” Bennett says. “By investing in resilient, demand-driven markets and Established Premium Neighborhood locations with barriers to entry, the company expects to achieve its strategic objective.” Established Premium Neighborhoods are generally defined as areas with high per-sf-prices for single-family homes.Gables Celebration is located in an affluent community of 8,000 residents founded by Walt Disney World in 1994. Like Gables Residential, Disney is also following a long-term disposition strategy of selected assets. Disney’s most recent disposition was the 273,000-sf Towne Center and 6.8 acres of prime adjoining land. The buyer, Lexin Capital, also a New York-based firm, paid $24 million for the asset, as GlobeSt.com previously reported.

Tarragon’s presence in metro Orlando continues to grow, especially since it acquired Guardian Equities Inc., a little-known, privately held investment group from local multifamily developer/investor Alan Ginsburg in July 2003. The stock-cash transaction was valued at $61.6 million, as GlobeSt.com previously reported.