National multifamily owner-operator McKinley just picked up two apartment complexes near Orlando's Lake Conway area for $72.46 million.
The company paid $48.96 million for the Aria Beach Apartments, a lakeside 360-unit apartment community at 3211 S. Semoran Blvd., and $23.5 million for a 200-unit garden apartment community at 2401 S. Bumby Ave. called the Celano Apartments.
In total, the portfolio deal features 560 apartments, meaning the trade breaks down to roughly $129,400 per unit. McKinley financed the deal with two loans adding up to $73.7 million from Canadian Imperial Bank of Commerce (CIBC).
InvestRes, a residential real estate investment group based in Tampa, sold the Aria Beach Apartments, which formerly operated as the Shore Club Apartments. The complex was built in 1973 on the shores of Lake Fredrica. InvestRes paid $29.15 million for the property in 2015.
An affiliate of Nashville-based Covenant Capital Group sold the Celano Apartments. The company paid $13.4 million for the property in 2016.
Built in 1972, amenities at the complex include access to a community fitness center, pool, dog park, laundry center and outdoor grill kitchen
The property sits on nearly 12 acres of land along South Bumby Avenue in the burgeoning Hourglass District created by National Real Estate’s Giovanni and Elise Fernandez in order to revitalize the historic neighborhood and encourage local merchants to open shop there.
Just recently, Foxtail Coffee and vegan restaurant Leguminati have opened in the district.
McKinley has been busy adding to its collection of apartment complexes. CEO and co-owner Albert Berriz said the firm is a regular shopper in the Orlando market, with a particular focus in the Airport/Downtown Orlando, Winter Park and I-Drive submarkets.
“Our team has been buying steadily in those markets,” Berriz said. “We recently bought Sapphire apartments in Winter Park. These two are in the Downtown/Airport market.”
Regarding the most recent deal, Berriz said the two opportunities to own value-add multifamily projects presented themselves before the firm around the same time.
Full renovations to the apartments are expected to begin immediately. Upgrades will include retouching the interiors and extensive exterior improvements to amenities and landscaping.
Both the Aria Beach Apartments and the Celano Apartments sit across from apartment complexes that McKinley already owns. Barriz said that’s a common strategy of the company.
McKinley now owns close to 8,000 units across Central Florida, he said.
Harry Collison, senior vice president and managing director for acquisitions and dispositions, represented McKinley in the deals. He said the acquisition was part of a complex 1031 exchange transaction.
Scott Ramey, senior managing director for ARA Newmark in Orlando, represented both sellers in the transaction.
According a first quarter report by RealPage, Inc., the Orlando-Kissimmee-Sanford market's 95.8-percent apartment occupancy level exceeds the national average by more than half a percent, and apartment rents in the region have increased 3.7 percent year over year.
“Orlando is a core market for us. Always has been,” Barriz said. He adds that the company has been active in the market since 1982. “We’re never going to leave.”