Camden Property Trust paid $80.75 million on Thursday for the newest apartment building in downtown Orlando's North Quarter neighborhood, a premium price that reflects the highest value per square foot paid for multifamily in Orlando in the last decade.
Located at 777 N. Orange Ave., the nine-story, 333-unit The Sevens apartments was developed and built by Columbus-based The Pizzuti Companies between 2014 and 2016.
Camden has rebranded the property as of Friday to Camden North Quarter, and will manage itself. Pizzuti's former property manager Greystar was not retained.
"We've been targeting infill Orlando acquisitions for some time, and this is a property that fits really nicely into our portfolio. It's a well-constructed building, and we were attracted to the walkable downtown location," Stanley Jones, vice president of real estate investments, told GrowthSpotter on Friday.
"We feel we acquired this at a 10 to 15 percent discount to replacement cost, so for that reason as well it's a great fit."
This will be Camden's second asset in the downtown Orlando submarket. It developed and built the 268-unit Camden Orange Court in 2008 one block to the south, at 668 N. Orange Ave., which Jones said is now 96 percent occupied.
With a rooftop pool, a host of modern amenities and market-leading rents to match, Pizzuti leased the property up to 95 percent occupancy at time of sale.
The developer was unable, however, to fill 7,886 square feet of vacant retail/office space on the ground floor. Jill Rose of BishopBeale has been marketing the space since March 2017, who replaced JLL's Orlando retail team that was unable to lease it during the development and construction period.
Camden has its own retail group that will likely oversee leasing of the North Quarter property's retail space, but will also rely on expertise of the local brokerage community, Jones said.
The building's average unit net rentable size is 806 square feet, resulting in a net rentable area of 268,238 square feet. With that, Camden paid more than $300 per square foot, the highest multifamily sales value in Orlando since the mid-2000s.
Luke Wickham, Shelton Granade and Justin Basquill of CBRE Orlando represented the seller, and marketed the property for roughly 30 days in November before Camden's bid was chosen.
The Downtown Orlando submarket is supporting the highest rent averages in Greater Orlando at roughly $1,700 per month (close to $2 per square foot) for properties built since 2013, according to late 2017 data from CBRE.
"There are several deals downtown that are getting rents over $2 per square foot," said Granade, vice chairman with CBRE's Investment Properties Group. "With the anchors of two major hospital campuses on either side of downtown, increasing amenities such as the Dr. Phillips Performing Arts Center, Creative Village and new soccer stadium, and I-4 traffic getting worse every day demand for luxury downtown rentals continues to be very strong.
"We firmly believe downtown living will become more and more desirable, and groups like Camden are confirming that with their investment in downtown Orlando," he added.
Looking forward, Camden is evaluating and underwriting other multifamily assets in Greater Orlando, a target market where it would like to boost its portfolio, Jones said.
Camden now owns 10 apartment properties in Greater Orlando totaling 3,873 units.