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SARASOTA, FL-Orlando-based Tarragon South Development Corp., one of Central Florida's most aggressive condo converters, has entered the Sarasota multifamily market with the $35-million purchase of the 248-unit, 96%-occupied Whispering Oaks at Palm Aire apartment community at 8445 Gardens Circle here. Tarragon South, an affiliate of New York City-based Tarragon Corp., paid ITW Mortgage Investments III of Glenview, IL $141,129 per unit for the 251,504-sf property.

The per-unit price is considered a premium but not unusual at this time, local brokers tell GlobeSt.com. "Apartments that would normally sell at $50 per sf to $70 per sf are selling for $120 per sf and up, and some units worth $60,000 as an apartment are selling at $100,000 and up to condo converters," says Steven M. Ekovich, first vice president and regional manager of the Tampa and Orlando offices for Marcus & Millichap Real Estate Investment Brokerage Co. of Walnut Creek, CA.

GMH Capital Partners of Newtown Square, PA negotiated the sale of the 14-year-old, garden-style apartments for the seller. Tarragon South represented itself. The 3.5% capitalization rate, while low to some buyers, isn't an eye-opener any more in the condo conversion craze sweeping the Southeast.

"Condo converters are not income buyers," GMH vice president R. Eric Mattson Jr. tells GlobeSt.com. "They buy based on what they feel they can sell the condos for." Mattson adds, "The condo conversion market is highly competitive in Florida." GMH account representative Morgen J. Busch worked with Mattson on the deal.

The property was on the market for only 22 days. The transaction took another 60 days to complete, from contract signing to closing.

For ITW, the disposition was its second in Central Florida in two months. In July, Illinois Tool Works Inc. sold its 17-year-old, 90%-leased, 147,214-sf Crossroads at Lake Buena Vista shopping center to New York-based TIAA-CREF for $57 million or $387.19 per sf, as GlobeSt.com previously reported. The per-sf price is the highest recorded this year in metro Orlando, according to GlobeSt.com research.

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GlobeSt.com EXCLUSIVE: Tarragon South Enters Sarasota Condo Conversion Market

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