The latest transaction involves the $23.5-million sale of Three Palms Apartments, along North Dale Mabry Highway in Tampa. CBRE represented a joint venture between Blackrock and BH Equities in purchasing the 438-unit complex from Jupiter-based Landmark Residential.
"We haven't had a true class A transaction in almost a year and a half," Jim Bobbitt, senior vice president with CBRE's Tampa office, tells GlobeSt.com. He says many of the apartment properties coming onto the market locally were built in the 1980s and are trading at an 8% cap rate.
Three Palms opened in 1986 and underwent nearly $4 million worth of renovations in mid-2008. Landmark paid $35 million for the complex in July 2006, according to Bobbitt.
The latest transaction amounts to $53,600 per unit, slightly below the $62,000 median price recorded over the past year by Marcus & Millichap. The current median is 9% below the peak price seen three years ago.
Marcus & Millichap predicts in a research report that prospective apartment buyers in the Tampa Bay market will remain conservative, possibly delaying purchases on the premise that prices will fall further. "Many investors are focusing on acquisition opportunities with attractive assumable financing in place or instances where the sellers carry a second mortgage," the report states.
CBRE says in its own report that even though Tampa Bay and other Florida markets are hinging on the national economy, overall fundamentals are sound with limited new construction in the pipeline. Monthly rents currently average on either side of the $800 mark, with vacancy averaging 10%.
Bobbitt says he anticipates up to eight more closings in the market through the remainder of this year. He expects market conditions to remain the same going into next year, with improvements expected in 2011.
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