BF Group Swallows Extra Costs to Gain Condo Conversion

DAVIE, FL-Miami-based BF Group, a prolific buyer of multifamily rental properties for condo conversion, acquired Sabal Palm Manor Apartments, a 118-unit asset at 3210 Sabal Palm Manor. In addition to paying just under $12.8 million, or about $108,000 a unit, for the asset, BF also covered the costs associated with the defeasance of the owner’s existing debt on the property.

The complex, located on about 7.3 acres, was completed in 2001 and contains only two-bedroom, two-bath units, which average about 1,045 per sf and rent for approximately $1,000 a month. “The units are the ideal size for condo conversion,” Rosendo Caveiro, director of Cushman & Wakefield’s South Florida apartment brokerage operations, tells GlobeSt.com. He and Brad Capas, C&W’s senior director, represented Miami-based Poinciana Developers in marketing and selling the property.

“It’s a solid class A property in excellent condition,” Caveiro says. “Every prospective buyer fell in love with it, and some may have stretched [to exceed the asking price]. But it had an ugly loan with rates materially above market rate, a lockout provision that precluded prepayment until May and a sizeable prepayment penalty. Since the property is to be converted to condominiums, assumption of the loan was not a viable option. Condo converters like simplicity.”