Thank you for sharing!

Your article was successfully shared with the contacts you provided.

(To read more on the multifamily market, click here.)

ORLANDO-On the market for only 30 days, the 144-unit Hollowbrook Apartments and the 100-unit Maitland Oaks community are under new ownership today. Both class B properties are 99% occupied.

Bidding against five competitors, Orlando Neighborhood Improvement Corp., a nonprofit, paid Atlanta-based RHA/Affordable Housing III Inc. $12.98 million or an average $53,230 per unit for the two properties. The 37-year-old Hollowbrook is at 5465 Curry Ford Rd.; the 25-year-old Maitland Oaks is at 8339 Pembrook Villa Circle.

The properties were listed at a total $13.5 million or $55,328 per unit. The seller was asking $5.24 million or $52,400 per unit ($70.43 per sf) for Maitland Oaks, and $8.26 million or $57,400 per unit ($55.73) per sf for Hollowbrook. Hal Warren, senior director of Cushman & Wakefield of Florida’s Apartment Brokerage Services division in Orlando, and Cole Whitaker, the division’s executive director, brokered the transaction.

Warren tells GlobeSt.com the acquisition price was “far below replacement cost” of at least $95,000 per unit or $125 to $175 per sf. He says the deal was done at this time because “the seller just felt it was time to take advantage of attractive pricing in the Orlando market.”

A governmental challenge the seller had to overcome was the properties’ land use restriction status, Warren says. “The property had a LURA [land use restriction agreement] and was not a candidate for conversion” to condominium homes, the broker tells GlobeSt.com. The Orlando office of Atlanta-based Primary Capital Advisors provided acquisition financing.

The acquisition was a good deal for the buyer, Warren tells GlobeSt.com, because the two properties are “mostly in built-out submarkets with good employment drivers” and minimal competition. “Due to Florida’s Concurrency legislation, escalating impact fees have increased to a current average of $9,000 per unit,” the broker notes. “Presently, there are no competing multifamily developments under construction within either property’s immediate neighborhood.”

Warren cites additional “barriers to entry” by rival developers. “Due to the limited availability of additional multifamily development sites and strong growth factors within the immediate submarket, these properties should continue to enjoy the benefits of their locations.”

He says “recent land values for multifamily [development] in Central Florida have exceeded $12,000 per unit, while the average cost for new construction in Metro Orlando exceeds $95,000 per unit.”

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 3 free articles* across the ALM subscription network every 30 days
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

GlobeSt. Apartments 2020Event

Join 1000+ of the industry's top owners, investors, developers, brokers & financiers at THE MULTIFAMILY EVENT OF THE YEAR!

Get More Information


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.