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FORT MYERS, FL-Two weeks on the market, the 32-year-old, 102-unit, 100%-leased Sunterra Apartments in the center of this southwest coast city had no trouble finding a buyer. Chicago-based Sunterra Apartments LLC paid SC Investments LC of Orlando $5.2 million, or $43,333 per unit, for the newly renovated property at 3541 Evans Ave.

The Meyer Kattan Group of Marcus & Millichap Real Estate Investment Brokerage Co. put the deal together. The deal was done at this time because the selling entity partnership “wanted to split apart in their investment worlds,” Darron Kattan tells GlobeSt.com. The seller had invested $1 million in renovating the property in 2003.

Kattan, Andrew Wright and Jeff Meyer of the Meyer Kattan Group and Daniel Draizen of Marcus & Millichap’s Fort Lauderdale office represented buyer and seller. The deal was done quickly through Meyer Kattan Group’s international database of prospects.

“By virtue of the two other sales we completed for this client, he knew we had access to the biggest pool of qualified investors in the nation, many of whom look to Florida as a place to bring their capital,” Kattan tells GlobeSt.com. “Those buyers have a bigger vision for appreciation versus the local world and the seller wanted to access that pool the best way possible.”

Unlike the flood of recent apartment-to-condo conversions in Central and Southwest Florida, Sunterra Apartments will not go that route, Kattan says. “Sunterra has 90 of the 120 units that were on a project-based Section 8 contract, and therefore could not be converted today,” the broker tells GlobeSt.com. Sunterra is also “not the type of property that you would convert, even if you did opt out of the Section 8 contract at its next renewal, which you likely wouldn’t do,” Kattan adds.

The Sunterra sale “highlights the demand for Section 8 deals, as the converters won’t convert it, so the operators are looking for those types of deals, since there is still some yield in them,” Kattan says. The sale took 90 days to complete, from contract signing to closing.

The lengthy closing period was “mostly due to a loan assumption of a conduit loan,” the broker says. “It was a recently placed loan, so the leverage and rate were not too far off market, but the assumption process always leads to delays.” Kattan adds, “We also had to go through an assumption of the HUD contract, which we did concurrently with the loan assumption.”

The average asking gross base rent at the 93,528-sf Sunterra is $638 per month or 82 cents per sf. The rent range is $553 for a one-bedroom, one-bath unit to $775 for a three-bedroom, 1.5-bath unit.

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