ORLANDO-Blue Rock Partners LLC recently purchased the 168-unit Woodbridge Apartments at 7745 Brandywood Circle in Winter Park. With two additional complexes under contract, the Tampa-based apartment community owner-operator is making a push to double its holdings in the Orlando market for a total of 2,000 units.
Apartment Realty Advisors represented Blue Rock in the deal. Financial terms were not disclosed. But Reuven Oded, co-managing partner of Blue Rock, tells GlobeSt.com the firm’s acquisition strategy targets value-added properties with a significant upside potential across Orlando and Tampa. Blue Rock holds nearly 5,000 apartment units in Central Florida.
“We are very bullish on the Orlando metropolitan area,” Oded says. “Orlando naturally was hit a bit harder because of the skewed tourism component of its economy. With the recovery underway, we feel the spigots will open and tourists will start to stream into Orlando and job growth will follow.”
Oded is also encouraged by the high-speed rail project in Tampa. President Obama approved $1.25 billion in funding for the rail that runs from Orlando to Tampa. Oded expects the rail to bring jobs and transportation advantages to the region. “Orlando is going to come back with a vengeance and we want to be positioned for the demand,” Oded says. “While it may not be this year or next, we feel in the next three to five years Orlando has a bright future.”
Some positive trends are already emerging in Orlando’s multifamily market. Tenant demand for class A units has been resilient, according to Marcus & Millichap. Five of Orlando’s 11 submarkets post class A vacancy of less than 10%, though concessions could take a few more quarters to burn off.
Stephen St. Clair, a director in the Orlando office of Marcus & Millichap, tells GlobeSt.com that Blue Rock’s Orlando acquisition strategy is not unusual. With most investors betting the market is bouncing along the bottom, aggressive cash buyers are competing for class B and class A-minus multifamily properties in the region.
“Many properties were sold to investors with an eye toward condo conversions and they missed that window,” St. Clair says. “The debt they put on those properties was so exorbitant that they couldn’t operate at rents high enough to service the debt. That’s why you see so many broken condos for sale. I expect more to be put on the market in the next 12 months and companies looking for value-added deals will make acquisitions.”
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