RIVIERA BEACH, FL-In a sign that a recovery is now underway in Florida’s multifamily residential market, Seabreeze Harbor Apartment Homes has sold for $14.98 million. The 520-unit complex includes 37 low-rise buildings spread across 40 acres of land.
Continental Real Estate Companies Vice President Peter Mekras represented the seller, a private Miami-based owner and operator, in the transaction. The seller acquired the property for $11 million in September 2009 from an institutional owner that had previously acquired the asset for $33 million in June 2006.
“This property traded for $33 million at the height of the market,” Mekras tells GlobeSt.com. “That buyer made a bold move at a questionable time, but he did add some value to the property. Seabreeze Harbor came into some rough times—criminal elements had taken over the property. He mitigated those problems during his hold period.”
Located at 2304 North Congress Avenue in Riviera Beach, the property was approximately 50% occupied at the time of the sale. Mekras says his client’s original objective was to hold the property and stabilize, but the Miami-based owner operator decided to leave some money on the table and let the new buyer take the lease up risks.
The property’s new owner is planning to extensively renovate, rebrand, and reposition the asset. Charles Foschini of CB Richard Ellis Capital Markets sourced the buyer’s financing, a non-recourse loan from a balance sheet lender. The seller was legally represented by Gerald Biondo and Brandon Biondo of Murai, Wald, and Biondo.
“The buyer pool has grown drastically,” Mekras says. “Today you can borrow money on a non-recourse basis for assets that are not stabilized, which is real change in the market. Lenders basically feel that the market is more stable and it’s time to stick their to toe back into the water.”
Indeed, Mekras says the Seabreeze Harbor sale demonstrates that a recovery in Florida’s multifamily market is in its early stages. He’s beginning to see a return to conditions where non-stabilized assets poised to benefit from value-add strategies are again desirable to buyers: “Eighteen months ago, Seabreeze Harbor was illiquid and non-recourse financing was unavailable for non-performing assets, but the market has since changed dramatically and there is reason to believe that we will see a gradual uptick in multifamily trades throughout the remainder of 2011.”
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