MIAMI—Star Creek Apartments, a 314-unit multifamily complex in North Miami Beach, just traded hands again. Financial terms of the deal were not disclosed.
Peter Mekras, senior vice president at Continental Real Estate Companies (CREC), represented a private Miami-based owner and operator in the multifamily sale. The deal marks CREC’s fifth multifamily sale in the first five months of 2012. Gerald Biondo and Brandon Biondo of Murai, Wald, Biondo & Moreno PA represented the seller.
Mekras tells GlobeSt.com the sale demonstrates continued investor demand for multifamily communities in Florida, particularly among local owners and operators who understand the underlying value of older assets that may not attract interest from institutional buyers. The multifamily asset is about 94% occupied. CREC received more than 15 offers on the property.
“In the midst of the transaction we had to work to get government approval to retire the subsidized financing in exchange for keeping some of the units as affordable housing,” Mekras says. The buyer utilized 1031 proceeds from a like kind exchange and a first mortgage from City National Bank to finance the acquisition.
Star Creek Apartments was originally developed in two phases in 1985 and 1987. When the seller acquired the property for $11 million nearly 10 years ago, the multifamily complex required significant maintenance and upgrades.
In the decade since the multifamily property traded hands, it has stabilized and attracted new tenant activity, satisfying outstanding subsidized debt components. Mekras says the buyer views the property as a long-term hold and will implement an extensive renovation, rebranding, and repositioning program.
“Irrespective of all the talk of rent growth and positive signs in the market, the rents that are set by the regulatory body actually decreased in the middle of our process,” Mekras explains. “That was a great challenge because we couldn’t derive an understanding of why rents would actually decrease. The buyer inherited the lower rent.”
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