UPDATED: June 29, 2016 10:47 AM — Aventura-based multifamily investor Advenir paid $42.75 million on Tuesday for the 408-unit Oak Forest Apartments in Ocoee, plans $5.5 million in upgrades and has another $200 million to spend on acquisitions this year, the company's chief investment officer told GrowthSpotter.
Located across two phases at 3100 and 3200 Old Winter Garden Road, the property encompasses 26.87 acres with 29 three-story buildings and two community centers with swimming pools, built between 1989 and 1991.
The property lies directly southwest of Health Central Hospital, across the street from a Walmart Supercenter, and is the only apartment community in Ocoee zoned for Windermere schools.
"Oak Forest (now Advenir at The Oaks) presented Advenir with a clear value-add property in a submarket that is experiencing strong rental fundamentals, economic expansion and limited new supply," said Todd Linden, via e-mail on Wednesday morning.
Advenir has a $5.5 million capital improvement budget to enhance the property's exterior, amenities and unit interiors, with work to begin immediately, he said.
Advenir's purchase in Ocoee comes roughly four weeks after the company spent $18 million to buy the 272-unit Parkview Crossing Apartments in the Fern Park community, south of Altamonte Springs.
"The company has acquired seven properties in 2016 totaling $300 million throughout Florida, Colorado and Texas," Linden said. "We will continue to look for the right opportunities that fit our investment strategy with a goal of acquiring an additional $200 Million in Multifamily property before year end. Greater Orlando and Tampa will continue to be a top priority for us."
Charles Foschini, vice chairman of CBRE Capital Markets in Miami who has represented Advenir on most of its transactions for nearly 20 years, provided a $33.7 million Freddie Mac loan to help finance the acquisition, a contract also signed on Tuesday.
Advenir is a select sponsor with Freddie Mac, which means they have such a strong relationship through a seller-servicer like CBRE that they can get a loan at the best terms available in the market at any given time, he said.
"On this property, they did what is called a capped ARM product (adjustable rate mortgage), or an interest-only loan," Foschini continued. "So 100 percent of the loan amount went toward the purchase price, but the extended period of interest-only generates a lot of cash flow at the property that can be put back into renovations."
The sellers were affiliates of Palatine Capital Partners Management out of Miami Beach, a principal investment firm focused on small- and mid-cap real estate assets. Palatine previously paid $27.07 million in April 2014 for the properties. ARA represented the seller in the deal.
Advenir has a regional office in Orlando and operates more than 1,000 apartment units in the area.