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JV of two Boca-based CRE investors pays $36.6M for Orlando apts, seeks more

JV of two Boca-based CRE investors pays $36.6M for Orlando apts, seeks more
Highlighted in blue is the Tuscany Bay Apartments property in Southeast Orlando, set on S. Semoran Boulevard, west of its intersection with E. Michigan Street. (Orange County Property Appraiser)

A joint venture of two Boca Raton-based real estate investors paid $36.65 million on Jan. 6 for the 396-unit Tuscany Bay Apartments in Southeast Orlando. It's the JV's first multifamily asset in Greater Orlando, with plans to pursue all commercial property types locally in 2017, a lead executive with the buyer told GrowthSpotter.

Located at 2501 S. Semoran Blvd., the 34.94-acre property lies on the southeast corner with E. Grant Street, west of the Ventura Country Club and golf course.

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"We've always liked the location, think this is a fantastic rental market, and see a lot of opportunity to reposition this asset," said Shane Hillsley, managing director with Duncan Hillsley Capital, which bought the property through JV the Rosehill Group with partner PEBB Capital, and Atlantic Creek Real Estate Partners as a separate equity investor.

"We're just starting to determine how much will be invested in capital improvements, but this will be a significant repositioning," he continued. "We'll upgrade all the amenities, the clubhouse, and exterior and interior of all units."

Berkadia's South Florida-based team led by Brad Williamson arranged a $30.5 million acquisition and rehabilitation loan for Tuscany Bay on behalf of borrower the Rosehill Group.

The financing was sourced from Freddie Mac's Value-Add and Green Up programs, which offer competitive rates for the rehabilitation of apartment properties, and improvements in energy and water efficiencies of at least 15 percent, according to Berkadia.

This is the fourth multifamily deal Duncan Hillsley and PEBB have closed through Rosehill Group in the past few years, with a few more acquisitions in progress now, Hillsley said.

The JV entity currently owns this property and one other in St. Petersburg. Duncan Hillsley is a private commercial real estate investor focused on distressed and underperforming assets, and has historically owned up to 17,000 multifamliy units but recently sold all its assets, Hillsley said.

Greystar was brought in last week to take over property management at Tuscany Bay, hired following a long-standing relationship with the buyers, Hillsley said. Occupancy at the property was above 90 percent at time of sale.

Looking forward, Orlando will be a focal market for Rosehill Group as it actively seeks value-add acquisition targets across all commercial property types, Hillsley said.

The group's equity is sourced from family offices that it works closely with, and transactions with institutional partners like Atlantic Creek, he added.

The seller was an affiliate of Philadelphia-based RAIT Financial Trust, which previously paid $32.68 million in February 2007 for the apartments and nearly 35 acres.

Have a tip about Central Florida development? Contact me at bmoser@growthspotter.com, (407) 420-5685 or @bobmoser333. Follow GrowthSpotter on Facebook, Twitter and LinkedIn.

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