Why Palm Beach is Ideal for Multifamily Investors

PALM BEACH, FL—Even as class A multifamily construction rises from the dirt in cities across South Florida, investors are still eyeing class B and C opportunities in the Tri-County area. And, in fact, Palm Beach multifamily is making its way on more investor radar screens all the way around.

The latest example is Vista Pointe, a 314-unit multifamily community spanning 238,862 gross square feet in Palm Springs, FL. Avesta Real Estate Fund I acquired Vista Pointe from Riverfront Capital for $18.11 million. CBRE represented the seller in the transaction. Neither Avesta or Riverfront could immediately be reached for comment on the deal.

“Vista Pointe presents an exceptional value-add opportunity,” says Calum Weaver, a first vice president in CBRE's Multi-Housing Private Capital Group. “Throughout South Florida investors are seeking Class B and C properties that can be repositioned to attract higher rents.”

Located at 555 Kirk Road in Palm Springs, Vista Pointe offers nearby access to
Interstate 95. The multifamily community is within 20 minutes of two major Palm Beach employment centers—Downtown West Palm Beach and Boca Raton.

“With almost 3,500 annual net units absorbed and occupancies at 96%, the Palm Beach County market is ideal for investors to implement value-add improvements and still be positioned notably below Class A rents within the area,” Weaver says. The community is 95% occupied.

Vista Pointe's six three-story buildings sit on nine acres. The complex offers 227 one-bedroom/one-bath garden-style units and 87 two-bedroom/1.5-bath units, all with central A/C and heat. Amenities include a clubhouse with free Wi-Fi, a multi-purpose sports court and fitness center, swimming pool with sundeck, business center, playground, and laundry facilities.

“U.S. multi-housing demand strengthened notably at the end of 2013, with the market recording its highest nationwide level of net absorption since 2009—and one its best showings on record—on the back of strong-performing secondary markets,” says Peter Donovan, senior managing director of CBRE Capital Markets for the firm's Multi-Housing Group. “There continues to be an abundant supply of equity and debt capital from all types of foreign and domestic players.”

Indeed, an affiliate of New York-based Related Companies is zeroing in on affordable housing in West Palm Beach, FL. Woodlake Preservation, a Florida limited partnership formed in 2012 to acquire and own the fee interest and renovate Woodlake Apartments, has received a $15.2 million Fannie Mae Loan through Centerline Capital Group to achieve oen of its affordable housing goals.

“CBRE private capital sold 20 properties, totaling $66 million, in South Florida during the first half of 2013,” Weaver tells GlobeSt.com. “That's a record number of deals and we think positive market fundamentals coupled with low interest rates and plentiful investment capital are going to continue to drive growth.”