JP Morgan Flips Reserve at Naples Within Eight Months

NAPLES, FL-In less than a year JP Morgan Investment Management Inc. both sets, then gets a record price for a multifamily asset here. It acquired the Reserve at Naples, a class AA, 300-unit luxury garden apartment complex, for $42.9 million or $142,883 a unit in late November 2004. Eight months later it sells the property to an affiliate of Rockville, MD-based Capreit.

Capreit's price, which is undisclosed, set another record for both price per unit and price per sf, according to Kevin Judd, SVP of Boca Raton-based Apartment Realty Advisors, who participated in both transactions. Citing a confidentiality agreement, Judd declined to disclose Capreit's price, but tells GlobeSt.com that JP Morgan's gain "was many millions of dollars." On condition of anonymity, an area multifamily expert tells GlobeSt.com the gain was close to 50%.

"JP Morgan did not act like JP Morgan," Judd says. "It's unusual for them to sell an asset in less than a year, but this is an unusual market. Naples is arguably the hottest residential market in the state," he says, noting, "the median home price here was the first in the state to eclipse $400,000."

Asked if JP Morgan was seeking to sell, or the buyer sought the property, Judd says, "it really was a little bit of both. The decision to sell was gauged by a lot of different elements, including the attractiveness of the property and current market conditions." Capreit plans a condo conversion, Judd says, a move not contemplated by JP Morgan. Marc deBaptiste, an ARA principal, worked with Judd on this and the earlier transaction.

Reserve at Naples was completed in 2002. It consists of 14 two- and three-story buildings surrounded by two lakes. "It is one of the highest quality assets in the market," Judd says. Units have balconies or patios, garden tubs, storage areas, attached garages, custom kitchens and built-in televisions. The property includes a clubhouse, spa, fitness center, lighted tennis court, indoor racquetball court, video library, children's playroom and walking/jogging trail. Published rental rates range from $950 to $1,396 a month.