Outrigger Apartments Trades After Delayed Closings

Creative Choice Homes XXXV Ltd. of Fort Lauderdale paid Outrigger Partners Ltd. of Des Moines $24,848 per unit, or $33 per sf, for the 80%-leased property at 1001 Shoreview Dr., about a half mile east and south of the new Baldwin Park mixed-use community in suburban Winter Park.

The buyer plans to invest about $20,000 per unit or an estimated total of $3.68 million in renovations and upgrading, Darrell H. Johnson of locally based Smith Equities Corp. tells GlobeSt.com. Johnson and Smith Equities vice president Gerald A. Smith brokered the transaction. "The buyer applied for and received proceeds for rehab as affordable housing," Johnson says.

Although the sale deal was struck in June 2004, "we were not able to close it until [recently] due to the requirement under rules of the financing authority that it must be owned by the prior owner for a minimum of 10 years," Johnson says.

While waiting for that deadline, Florida hurricanes Charley and Francis struck the property. "Charley did quite a bit of roof damage and then Francis did some more damage," Johnson says. "Prior to funding the deal for a December close, a lender's engineering report done specifically after the hurricane season was over, mentioned the 'possibility' of settlement."

Johnson say "this delayed the closing a month or so, while new reports were obtained. Then the issue of mold came to the forefront and it turned out the insurance company estimate--the covered insurance proceeds were to go to the buyer--was about $280,000 below the engineer estimate to repair it."

The broker says "this delayed the closing once again. Ultimately, the parties settled the deal and covered the shortage between them." Johnson adds, "This all goes to prove that long closes are to be avoided if at all possible."