Holliday Fenoglio Fowler, L.P. (HFF), on behalf of the owner, is marketing for sale the Florida Bulk Condominium Portfolio. The portfolio includes 658 residential units with a weighted average vintage of 2006 plus 54,780 square feet of retail space within five separate condominium communities, each of which can be acquired together or separately. The properties are offered free and clear of debt encumbrances. Each of the properties offers the flexibility to operate as rentals for cash flow while implementing a value-add strategy or selling condo units in a rapidly appreciating market.
Investors will have the unparalleled opportunity to operate the properties as rentals for cash flow while undertaking an accretive value-add program or sell condo units to retail buyers in a rapidly appreciating for-sale market. The properties will sell at an attractive basis significantly below replacement cost, below the pricing of similar rental communities and below current for-sale condominium prices.
The portfolio for sale comprises five Class A bulk condominium communities in some of the highest sought after markets in Florida, Orlando and Palm Beach. The properties are:
Two of the multi-family properties for sale, Paramount on Lake Eola and The Whitney, include 43,484 square feet and 11,296 square feet of street-level commercial space, respectively. In total, the 54,780 square feet of commercial space provides residents with a multitude of attractive retail and service options while contributing more than $1 million in additional revenues. The symbiotic relationship between the multi-housing and retail helps drive foot traffic to the properties while activating these urban corridors.
The portfolio properties are exceptionally positioned within their respective submarkets. These best-in-class locations exhibit strong employment drivers, healthy apartment fundamentals, progressing condominium markets and are within close proximity to lifestyle amenities, including multiple entertainment and retail destinations.
The annual effective rent growth was 4.7 percent and 3.1 percent in Q3 2016 in the Orlando and the Palm Beach markets, respectively. This comes on the heels of tremendous growth in both markets that has been fueled by rapid economic growth and outsized housing demand. Palm Beach has now posted 18 straight quarters of year-over-year rent growth greater than three percent, while Orlando has seen a remarkable 23 consecutive quarters. Over the past 24 months, these markets have been among the top-growth markets in the country, with average annual rent growth of 6.4 percent and 6.6 percent in Palm Beach and Orlando, respectively. Both markets are also posting minimal vacancies across the board with 4.1 percent in Orlando and 6.4 percent in Palm Beach.
The properties are in locations with favorable economic indicators and demographic trends. Florida is a national leader in both job and population growth with its structural advantages, such as low business costs and taxes, wealthy retirees, world class tourist attractions and high quality of life driven by great weather and relatively low cost of living. These positive fundamentals will continue to propel state wide rent growth and real estate appreciation. Moody’s forecasts Florida’s population growth at over 11 percent over the next five years, far outpacing the national mark projected at 4.1 percent, which will continue to drive housing demand and boost apartment occupancies and rent growth. With more than 2.3 million people projected to be added to Florida’s population during this time period, this translates into demand for approximately 230,000 new apartments.
Florida Bulk Condominium Portfolio is a multi-housing portfolio for sale that totals 658 units over five properties in addition to retail space in the Orlando and the Palm Beach markets. For more information on this or other properties for sale in Florida, please contact HFF Senior Managing Director Matt Mitchell, Managing Director Jaret Turkell, Director Maurice Habif and Associate Directors Brett Moss and Zach Nolan.