Behringer Harvard Opportunity REIT II Inc., which seeks value-add properties, made the 90% investment in a partnership with DeBartolo Development and Christian Tyler Properties LLC, both based in Tampa. The property's previous owner, Fort Myers-based BTS Monterrey Holdings LLC, had obtained a $69-million senior mortgage through Corus in 2006 to fund a conversion of the apartments into condominiums, according to a Securities and Exchange Commission filing.
"Changing market conditions subsequently interfered with the borrower's plans, and the completed condominium units were never sold," says Samuel Gillespie, chief operating officer of Behringer Harvard Opportunity REIT II. "This situation enabled us to acquire the senior mortgage debt at a discount and refocus the property as rental apartments."
The Palms of Monterrey has 17 three-story buildings surrounding a clubhouse, tennis court and two heated pools. Units range from one to three bedrooms with 1,000 to 1,500 square feet each.
DeBartolo and Christian Tyler, which now jointly own 10% of the Palms of Monterrey, also partnered this month to purchase the 160-acre Georgetown Apartments property in Tampa. The group paid $30.5 million for the waterfront site.
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