FORT LAUDERDALE, FL-Continuing the multifamily momentum in South Florida, Parrot’s Landing has sold for $42 million, or $75,000 a door. The 560-unit apartment complex calls North Lauderdale home.
Holliday Fenoglio Fowler managing director George Vail and Director Jaret Turkell led the investment sales team exclusively on behalf of the seller, Des Moines, IA-based Principal Global Investors. Grand Peaks Property Management, a Denver-based apartment management company, through a joint venture with Addison, Texas-based commercial real estate investor Behringer Harvard, purchased the property with a Fannie Mae loan. The property is 94% occupied.
“Available financing is driving a lot of multifamily sales like this one,” Vail tells GlobeSt.com. “You can do a five-year loan with an interest rate of less than 4%. The seven- to 10-year deals are in the low- to mid-4% range. On the seven and 10-year deals you can get a year or two of interest only. We expect interest rates to stay this low for the next 12 months.”
With low interest rates and a listing price that was below the cost of replacement, Vail says Parrot’s Landing drew 130 investor tours and 35 offers. The property is located at 7900 Hampton Boulevard across from the Hampton Pines Park, about two miles west of the Florida Turnpike.
The complex includes 24 residential buildings on more than 25 acres built in two phases. Phase I has 17 buildings with 408 units. Phase 1 was renovated between 2007 to 2010. Phase II was completed in 1997 and features seven buildings with 152 units. Community amenities include a fitness center, car care center, lighted tennis court, two clubhouses and three pools.
“This transaction shows that there are still some incredible deals to be had,” Jack McCabe, principal of McCabe Research & Consulting, tells GlobeSt.com. “A $75,000 per unit purchase price on this complex would be considered a good buy in my opinion. Other recent comparable transactions have run anywhere from $85,000 to $130,000 per door.”
Only 729 multifamily units were permitted in Broward County in 2009, according to Marcus & Millichap. That’s the lowest level in more than 30 years. A flurry of construction activity is expected in 2011 to accommodate former homeowners that have reentered the rental market.
“Demand is expected to continue to grow over the next several years, that’s why we have seen investor activity accelerate over the past few months,” McCabe says. “Parrot Landing may have sold for a little less than other recent transactions because it’s west of the Turnpike. But properties like these are becoming the prime choice for investors.”
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