ORLANDO-Sundance, a 300-unit apartment community in Clermont, has sold for $23.6 million. Located on John Lake Rd., the property was constructed in 2002 and is 96% occupied.
Cole Whitaker, head of the Southeast Division of Hendricks & Partners, an apartment property sales and research firm negotiated on behalf of the seller, Capreit Apartment Homes, a Rockville, MD-based owner and manager of multifamily housing communities. The buyer was Sundance Clermont, LLC, an entity affiliated with Dallas-based Westdale, a multifamily property management firm.
“The buyer felt comfortable that there’s not going to be new multifamily construction occurring in Clermont for quite a while due to both the local and county government positions on multifamily,” Whitaker tells GlobeSt.com. The City of Clermont shut down multifamily development that offers more than eight units an acre after the housing boom.
At $23.6 million, Whitaker says the pricing was attractive for a Central Florida property built in 2002. The property sold for less than $80,000 a door, and it would cost north of $110,000 a door to rebuild the property—if the city would even allow the construction. Freddie Mac financed the deal at a sub-5% interest rate.
Jay Ballard, a senior director in the Multifamily Group at Cushman & Wakefield in Orlando, tells GlobeSt.com that class A and class B assets like Sundance are in demand. The availability of debt at low interest rates, improving fundamentals in the market and a lack of new construction are driving deals in Central Florida.
Year-to-date, the Orlando market has seen about $312 million in transactions compared to $224 million a year ago, according to Cushman & Wakefield. Ballard predicts the market will see north of $400 million in transactions by the end of the year. But that pales in comparison to the historic average of $700 million to $900 million a year.
“Clearly, we’re seeing a rebound and multifamily is beginning to lead the transaction recovery versus other food groups,” Ballard says. “Most of the transactions are traditional legacy assets that are unencumbered with any type of hair. We have seen some transactions from the fractured basis, but those are typically distressed properties.”
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