Space Coast Multifamily Trades for $55M
After renovating the units, the seller was able to grow rents over its three-year hold period.
ROCKLEDGE, FL—This part of Florida has good proximity to the cluster of high-tech and aerospace industry firms along the state’s Space Coast. That’s where Continental Realty Corp. (CRC) has sold the 252-unit Polo Glen Apartments for $55.25 million.
The transaction represents the first asset sale by Baltimore-based Continental Realty Fund IV, a $164 million fund that seeks value-add retail and multifamily opportunities throughout the country.
The buyer was not disclosed.
Baltimore-based CRC acquired the property in 2016 from Pollack Shores for $38 million, or $150,000 per unit. It disposed of the asset for $220,000 per unit. Polo Glen is located near Cocoa Beach, Melbourne and Viera.
Scott Ramey and Patrick Dufour of Newmark Knight Frank Multifamily Capital Markets represented CRC in this transaction. “When we were initially introduced to the deal back in 2016, it was clear to us early on that there was something special about this area,” said David Donato, SVP of CRC in prepared remarks. “NASA’s downsizing on the Space Coast a few years prior had weakened the market temporarily—but we were able to see beyond the turbulence. We saw job growth fueled by the privatization of the aerospace industry, the emergence of government contracting jobs, and a thriving port.”
Built in 2008, Polo Glen has several design elements that differentiate it within the marketplace. More than 70% of the apartment homes at Polo Glen feature ground floor entries, nearly half include a direct-access garage, and the average unit size of 1,200 square feet is among the largest in the submarket.
Following its acquisition, CRC initiated a comprehensive repositioning effort. This included renovation of the clubhouse, leasing office, business center, and fitness center, featuring a Peloton bike studio. Outdoor amenity spaces were overhauled to bring in a California Kitchen, a large fire pit, and outdoor entertaining space. The enhancement package also included the conversion of the tennis court to a dog park, the painting of the community exterior, and an interior unit renovation program.
“During our hold we saw luxury product being developed in the area, garnering rents well above what the region had seen in the past,” Donato explained. “We rolled out an amenity renovation plan and an interior unit renovation program that allowed us to draft off those higher rents.” The firm was able to grow rents over its hold period as a result, he added.