$38M in New Financing for Older Palm Beach County Apartment Complexes
The financing is to pay for value-add improvements at communities near Lake Worth Beach and Palm Springs.
An out-of-state real estate investor and developer obtained $38.1 million to finance its value-add improvement strategy for two Palm Beach County apartment communities.
Federal Capital Partners, based in Chevy Chase, Maryland, secured the loan about two months after acquiring Costa Del Lago apartments west of Lake Worth Beach and Coronado Springs East in Palm Springs.
Newmark Knight Frank vice president Fernando Riboli in Boca Raton and executive managing director Matthew Williams in Tampa closed the transaction Dec. 20 on behalf of Federal Capital Partners.
The company acquired both three-story properties last October, according to the Palm Beach County property records. They are older multifamily developments. Costa Del Lago was built in 1972 and Coronado Springs in 1985.
The financing is to give Federal Capital an “opportunity to execute their value-add strategy while taking advantage of Palm Beach County’s strong employment and population growth,” Riboli said in a news release.
The 218-unit Costa Del Lago sits on 19 acres southeast of Congress Avenue and 10th Avenue North at 2508 10th Ave. N. The 151-unit Coronado Springs East is northeast of Military Trail and Purdy Lane at 555 Kirk Road.
“The communities provide renters in the area with quality, affordable housing options, and they represent great additions to FCP’s growing portfolio of multifamily properties in Florida,” Riboli said in an email.
South Florida multifamily is one of the strongest real estate categories, catching the eye of investors who much like Federal Capital Partners are executing value-add strategies. Much of the new investment has focused on suburbs with garden-style communities.
Value-add generally means investors buy older assets in a growing market, improve it and increase rents for higher yields.
Riboli declined to say whether Costa Del Lago and Coronado Springs East rents would increase once it’s done with improvements.
Costa Del Lago offers one-, two- and three-bedroom units with rents ranging from $1,050 to $1,500, according to the community’s website. Coronado Springs East offers one- and two-bedroom units with two bedrooms ranging from $1,100 to $1,250, according to the community’s website.
The transaction breaks down to $103,225 per unit.
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