Dallas-based Lantower Residential paid $15.5 million late last week for a mixed-use development site at the gateway entrance to NeoCity.
The sale price breaks down to $944,546 per acre — the highest price per acre ever paid for land in Osceola County.
Lantower, a subsidiary of H&R REIT, already has a presence in Central Florida with three previously acquired multifamily assets and a fourth planned for construction in Kissimmee’s Sunrise City. The company purchased the 16.4-acre Valencia Village asset through its Lantower NeoCity LLC affiliate, which was registered with the Florida Secretary of State in late May.
Executive Vice President Hunter Webb said the purchase price is offset by the fact that the property came with $3 million in impact fee credits. Lantower is early in the design process, but preliminary plans call for a 4-story, surface-parked luxury apartment community with 381 units with construction slated for mid-2023. Any potential non-residential uses are still to be determined.
The seller, Schoolfield Properties, bought the property across from Valencia College Kissimmee in 2014 for $1.2 million. Though it abuts Osceola County’s NeoCity technology district, the site is in the City of Kissimmee. It’s also in a qualified Opportunity Zone.
FL Retail Advisors managing partner Brian Capo brokered the sale on behalf of the Schoolfields, who had groomed it for development and waited for the NeoCity market to mature.
Schoolfield received approval in 2018 for a Mixed-Use Planned Unit Development, and in May the City Commission updated the zoning to T5-U (Transect 5/Mixed-Use Urban Center) to conform with the Kissimmee’s form-based code, which was adopted in 2020. The sellers mass graded the site and built NeoCity Way, a 4-lane divided roadway with a 10-foot paved bike trail, through the 16.4-acre property in exchange for the right to discharge stormwater into the master retention system in NeoCity. The road gives them two hard corners on U.S. 192 with a daily traffic count over 55,000.
“This asset has many attributes which made it more attractive and profitable than the adjacent and surrounding props that do not have those attributes and why they aren’t under contract or haven’t sold or will not sell for this kind of number,” Capo said, citing the signalized intersection and traffic counts. ”It has Impact fee credits. All of the dirt is developable because of the offsite retention and mass grading.”
Just east of the property is the recently completed 14 Fifty NeoCity luxury apartment community, formerly NeoSquare, where leases for a one-bedroom apartment start at $1,731. Across the street, Park Square Commercial is building the 287-unit Aston Square luxury apartment community.
Webb said once Lantower nets out the impact fee credits, the per-unit land costs will be closer to $30,000 per unit, which is actually less costly than other comparable projects.
NeoCity is Osceola County’s technology-driven development seeking to generate higher-paying jobs in the largely tourism-dependent county. Earlier this year County leaders signed a deal with New York City construction firm Sciame for a $1 billion Smart City town center. The developer will pay $565,000 per acre for the first 25 acres, for a total of $14.125 million, and holds the exclusive negotiating rights for an additional 45 acres at a price to be determined later. County Manager Don Fisher said the Sciame plans are on schedule to be submitted later this summer.
“When that went under contract, it moved the market,” Fisher said. “And this is going to move the market, as well. I think it shows that there’s value being created from the investment we made at NeoCity to create high-paying jobs.”
The Schoolfields had originally planned to hold the Valencia Village asset and engaged Capo and his team to market it for ground leases. Capo said they put it out to market unpriced and began to receive multiple serious offers to purchase the entire acreage.
“A tremendous amount, so much that we decided we had to stop taking calls and defer to only correspondence and questions via email to vet the serious from the tire kickers and snoopers,” he said. “We knew the right investors would jump through the hoops we installed. At the end of the day, we generated and vetted the right investor who demonstrated they were the right buyer for this project.”
The zoning allows up to 40 units per acre. Fisher said he hopes the developer brings forward a mix of uses for the site.
Osceola County Property Appraiser Katrina Scarborough said the county has seen unprecedented appreciation in property values over the last 18 months across all asset classes. Single-family home sale prices escalated at a rate of 30% year-over-year in 2021, and this year condo and townhouse sale prices are on track to rise nearly 40%. Despite that, she found the sale price for Valencia Village jaw-dropping.
“My initial reaction is shock,” she said. “However, with the market we’re in now, I think we get shocking numbers often.”
Daryl Carter has the listing for 12.2 acres adjacent to the Valencia Village property, which is on the market. Carter said they also chose to leave the offering unpriced so the market could determine the value. “I would like to give a note of thanks to the Schoolfields and Lantower for setting the bar very high,” he said. “That’s a really good number. I hope they’re very successful.”
NeoCity master planners Perkins+Will identified the Schoolfield site as having “the greatest potential to be a grand public entrance to the district, complete with public art, decorative lighting and a distinctive sign to spur commercial development in NeoCity and on privately owned land that fronts E192.”
In 2020, Lantower bought a 41-acre multifamily site in Sunrise City, a mixed-use community on Vineland Road. The developer has an approved Site Development Plan for a 321-unit complex and applied for building permits in 2019 but did not commence construction. On June 16, Lantower filed a revised SDP for 332 units on 26 acres.
Lantower President Phillipe LaPointe had previously told GrowthSpotter the company plans two phases of construction. Both SDP filings were for Lot 9, but the company still owns Lot 10, which is about 15 acres. The initial plans called for a mix of mid-rise garden-style apartment building and clusters of carriage-house units, along with a clubhouse, resort pool, dog park and two courtyard-style outdoor amenity areas.
LaPointe said both phases would share the central amenities. “We have taken the position that tenants want a very large, state-of-the-art gym and clubhouse with a best-in-class kitchen for entertaining their friends,” LaPointe said. “They’d rather have one exceptional pool that’s the center of the property than to have two pools.”
EDITOR’S NOTE: This story has been updated with comments from the developer.