STUART, FL-Harbour Breeze Apartments, a 104-unit, 80,978-square-foot property built in 1973, sold for $2.8 million. Located at 1202 SE Palm Beach Board, the bank-owned property yielded $34.57 per square foot.
Franklin Street’s managing director Darron Kattan, managing director Bob Goldfinger and director Kevin Kelleher represented both parties in the transaction. The seller, PBE Companies, LLC, owned the foreclosed real estate owned-property for more than a year and worked to stabilize the asset before marketing and sales efforts. The buyer, Stuart Breezes, LLC, is a private South Florida group.
“At 85% occupancy, we saw a lot of interest from buyers,” Kattan tells GlobeSt.com. “We sold the property for the contract price. The buyer got financing at about 4.75% on a cap rate of about 7.75%. This sale is an example of greater velocity we’re seeing in multifamily, even in tertiary markets. When properties are priced right, it’s a seller’s market.
PBE Companies made several improvements to Harbour Breeze Apartments, which offers one-, two- and three-bedroom units. The property includes a swimming pool, laundry facility, and a sundeck and tiki huts. Units are equipped with walk-in closets, remolded kitchens and baths, and new tile and carpet.
Goldfinger tells GlobeSt.com the buyer is betting it can add value with further improvements and better management in a sleepy market where it’s difficult to grow rents. Goldfinger says the buyer has a vision to up the rents and sell or refinance the property in the near- to mid-term.
“Part of our challenge as apartment brokers and specialist selling is that most of the lenders want all cash,” Goldfinger says. “They don’t want to offer terms—and it’s much harder to get financing for tertiary markets and older deals like this one. Plus, agency debt requires a lot of time and banks want fast quick sales. This buyer had a relationship with a lender, which helped them get the deal done.”
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