Hollywood-based multifamily developer and operator The Cornerstone Group paid more than $8.64 million last week for a 15-acre site behind Fashion Square Mall, planned and entitled for 356 apartments last year by Trammell Crow Residential.
Cornerstone has previously focused on affordable housing development in South Florida, with more than 60 apartment and condominium projects. But this will be its Orlando market entry and first market-rate apartments project in Florida, vice president of acquisitions and development Bill Kassebaum told GrowthSpotter.
"The company is excited to be part of a much larger redevelopment zone that will be the foundation of a unique upscale urban living and retail/dining nightlife destination," he said. "(We) recognize the unlocked value of the urban location and its logical connection to Baldwin Park, the soon to be redeveloped mall as well as the slated revitalization of the Cady Way Headway Trail."
Site work on the property should begin next week, Kassebaum said. Winter Park Construction has been hired as general contractor, and Charlan Brock & Associates was retained as architect from TCR's original plans to help tweak design.
Total project investment is now estimated at $53 million, Kassebaum said. The company is considering two banks as finalists for a construction loan at 62 percent loan to cost, he added.
While Cornerstone has its own property management firm in-house, it is leaning toward hiring ZRS Management for this development.
"I believe we'll be doing something here that hasn't been done in Orlando, a very millenial-focused luxury product," Kassebaum said. "We're going to be in Orlando for more than just this project. I would like to sign three more land deals in Orlando in (the next year), I think the city is a fantastic growth opportunity."
Cornerstone typically pursues off-market properties, he added, with flexibility from 2 acres to 20 with experience in urban mixed-use development.
Located south of Maguire Boulevard, east of McCullough Avenue and west of Bennett Road, Cornerstone's affiliate bought portions of four parcels that sum 15 acres and were formerly home to Anthem College, which has been demolished in recent months.
The deed was signed July 28, and recorded Tuesday in Orange County.
The seller was MMM Lakewood LLLP, long-time land owner of the 67 acres under Fashion Square Mall, Anthem College and an adjacent office building. It is a family limited partnership tracing back to the McCrory, Maguire and McCullough families, each of which make up six general partners that now manage it.
Local eminent domain attorney Raymer F. Maguire III directs one of those general partner business entities. Local accountant Lou Lauteria manages the land lease for Maguire and the other five general partners.
An affiliate of UP Development paid $35 million in 2013 for the leasehold position on MMM Lakewood's land, which included use of the Anthem building, the Orlando Corporate Park office building, and the right to operate and profit from the Fashion Square Mall buildings -- but never to own those buildings or the land, Maguire said.
At this time last year, TCR had earned Master Plan approval from the city in May, and managing director Jim Berardinelli was expecting to buy the land from UP by late August 2016 and begin construction on what was to be named "Alexan at Audubon," pegged at the time as a $50 million project.
But the deal was put on ice for months while UP Development's land owner affiliate became embroiled in a foreclosure lawsuit with its lender over late payments on the 80 acres that encompass Fashion Square Mall and surrounding property.
TCR sold its development interest for an undisclosed sum to Cornerstone in the second quarter of this year.
UP's affiliate gave up that leasehold interest earlier this year to lender The Bancorp on the 49 acres and buildings of Fashion Square Mall, following a lawsuit that came to a head in January and February, the Orlando Sentinel reported at the time.
The Bancorp has about 75 years remaining on its leasehold interest on the 49 acres and buildings under Fashion Square.