Gables Sells Last Tampa Asset for Record Per-Unit Price

Gables' decision presented an opportunity for New York-based Tarragon Corp., headed by chairman and CEO William S. Friedman, to continue its Florida buying spree. Tarragon paid Gables $41.2 million, or a premium $248,192 per unit, for Gables Beach Park, a newly constructed, 166-unit community of Mediterranean-designed townhomes and apartments at 114 Beach Haven Lane.

Area brokers specializing in multifamily property sales tell GlobeSt.com the $248,192-per-unit price is the highest transaction of its kind this year here and one of the highest prices paid for a multifamily product in the Tampa Bay market in the last 10 years. Area construction industry sources tell GlobeSt.com the estimated replacement cost of a comparable property is $200,000 per unit.

Gables CEO David Fitch says his company expects to record a gain of about $18.7 million, or 56 cents per diluted share, on the sale in the second quarter of this year. "This transaction is expected to result in an economic gain of approximately $0.9 million of accumulated depreciation," Fitch says.

The publicly traded Gables Residential manages 41,241 apartment homes in 160 communities and has an additional 11 communities with 2,673 apartment units under development or lease up.

For Tarragon, the acquisition of Gables Beach Park marks the company as one of the most aggressive multifamily investors in Florida, according to GlobeSt.com research. In January, for example, Tarragon closed on a $190-million deal with four separate sellers that brought the firm four townhouse and apartment communities totaling 1,223 units at an average price of $47.5 million per property and $155,355 per unit.

At that time, Tarragon CEO Friedman told GlobeSt.com he expected the four-property acquisition to generate gross individual condo unit sales of more than $250 million over the next two years after the properties are converted to condominiums. The properties are Arlington Park Town Homes at Westchase in Tampa; the Madison at Deerwood Jacksonville; the Yacht Club at Hypoloxo, a West Palm Beach suburb; and Georgetown at North Village in Celebration, 20 miles south of Downtown Orlando. Tarragon has increased the value of its Florida multifamily portfolio in the last three years to about $300 million, according to GlobeSt.com research.

Tarragon Corp. operates its Southeast portfolio through Tarragon South Development Corp., a 31-year-old, wholly owned, Orlando-based subsidiary that controls 16,000 rental apartments and 1.4 million sf of commercial space valued at about $1 billion, according to Tarragon South vice president Tony Martin who directs the firm's acquisition and condo conversion activities.