Broker's Diligence Pays Off in $2.7M Land Sale to JPI of Texas

As an example, he cites the $2.7 million land deal he just closed with Irving, TX-based JPI Apartment Development Inc. It took Ballard two years to do the deal and earn an undisclosed commission for himself and his firm.

JPI had an option to buy the land from Orlando owners Rudolph and Merry Lee Mancini but would go through with the deal only if the dirt was approved by Orange County and the state. JPI wants to build Jefferson Lofts at Orlando, a 254 student apartments complex on the site at an estimated development cost of $20 million.

"I had to convince county officials to change the property's land use and zoning, arrange a wetlands mitigation plan and coordinate engineering plans to meet permit requirements from the St. Johns River Water Management District and U.S. Army Corps of Engineers, as well as preliminary environmental studies and soil testing," Ballard tells GlobeSt.com.

He says, "I think that's a little above and beyond typical land brokerage services." JPI paid $135,000 per acre or $3.09 per sf.

JPI plans to break ground on the project by year end. The venture is one of the first entitled under the county's new student housing ordinance.

JPI's entry into Orlando's campus housing market comes as enrollment at the 30-year-old, 35,000-student University of Central Florida campus grows 10% annually. Demand for on-campus and off-campus student housing is acute, according to Paul M. Guyet, a vice president at Orlando-based Smith Equities Corp., one of the largest campus housing brokers in the nation.

Guyet says about a half dozen developers, including JPI, dominate this specialized market which has been producing average returns on costs of 10% to 20%. Buyers have been receiving capitalization rates in the 9% to 10% range.

"It's a great business for the right investor but it is not a good investment for an absentee owner, unless he or she has an excellent management team" on site, Guyet tells GlobeSt.com.

Besides JPI, among the most active developers of off-campus housing are GMH of Newton Square, PA; American Campus Communities, Austin, TX; Allen & O'Hara, Memphis, TN; Capstone Corp., Birmingham, AL; Fairfield Properties, Grand Prairie, TX; and FirstWorthing, Dallas.

JPI officials couldn't be reached at GlobeSt.com's publication deadline for comment on other similar housing projects the company may be planning in metro Orlando. But the firm's Web site says JPI's core development strategy is always targeted for a profit margin of 15%. Acquisitions are targeted for a minimum spread of 100 basis points. JPI holds its properties before selling for periods of three to five years.

The company calls itself one of the largest private multifamily real estate firms in the United States, based largely on its funding alliance with General Electric Capital Corp. of Stamford, CT. The Web site says GE has committed $650 million in equity to JPI to build and acquire apartment communities across the country.