PENSACOLA, FL-Passco Companies has acquired Marcus Pointe Grande Apartment Homes, a 248-unit luxury multifamily complex. The sale price was not disclosed. However, Passco did reveal it secured a 10-year loan at a 7.5 cap rate from Freddie Mac. Passco estimates it paid about 30% below replacement costs.
Dan Allen, vice chairman and a multihousing specialist at CB Richard Ellis, represented both Passco and the seller. The seller had foreclosed on the property, which is 95% occupied. “As is typical of foreclosure properties, Marcus Pointe was mismanaged,” Gary Goodman, senior vice president at Passco Companies, tells GlobeSt.com. “The lender that took back the property has a large number of REOs to deal with and it wasn’t getting enough attention. We see an opportunity to do more with the rents.”
Marcus Pointe is a five-year-old, class A luxury apartment community that spans 31 two-story buildings. The project offers 11 different floor plans, averaging 1,249 square feet per unit. Part of a master-planned development community that includes a golf course, a business park and a single-family development, Marcus Pointe is located within two miles of Pensacola’s largest retail and employment center.
Despite all the positive attributes, Goodman says the physical condition of the property deteriorated during the foreclosure. Passco plans to upgrade the common area clubhouse and fitness center and then work raise rents in line with the market.
The Marcus Pointe Grande grab is part of Passco’s 2011 strategy to build its nationwide multifamily portfolio to more than 13,000 units. The goal is to acquire at least 2,500 units during 2011. “We have a class A multifamily property under contract right now in Tennessee,” Goodman says. “We expect to be closing in about two months.”
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