UPDATED: November 16, 2017 3:17 PM — Virginia-based commercial real estate investors Harbor Group International paid $97.1 million this week for its second Orlando-area asset this year, buying the recently completed 449-unit Elan @ Audubon Park apartments in Orlando.
Located at 990 Warehouse Road, the 19-acre property lies northwest of Orlando's Fashion Square Mall, with 12 three- and four-story apartment buildings. It was rebranded this week as "Linden Audubon Park."
The deed was dated Monday and recorded Thursday in Orange County, with a sale price that reflects a value of $216,258 per unit.
"We think the (per-unit value) here is attractive for a couple reasons," president Richard Litton told GrowthSpotter. "Securing a site in this submarket is extremely difficult, we really don't see many come available. It's a supply-constrained market. We think we bought it at some discount to current replacement value, and the key points were supply protection combined with a tremendous school district, accessibility to downtown and expensive single-family homes in the area."
The property was developed by a joint venture of Greystar Real Estate Partners and The Carlyle Group, which previously paid $8.65 million for the land in October 2014 and finished construction in 2016. Shelton Granade of CBRE Orlando marketed the asset earlier this year.
The property had been managed by Greystar, but was taken over this week by Harbor Group's management affiliate.
The acquisition was made by 12 separate Delaware-based investment affiliates of Harbor Group, which together also sourced a $65.7 million loan from Bank of America.
Harbor Group has shifted its investment focus in the past year to newly-built multifamily in growth markets, and re-entered the Greater Orlando market back in June when it bought a new Class A apartment complex in Maitland for $44.35 million.
Litton said the company has accomplished its goal this year of placing more capital in Orlando. Harbor Group has shifted away from a Class B multifamily market that has overheated, and focused on newer product with better buy propositions directly from developers.
The company invested more than $850 million in equity in 2016 and is on track to invest even more this year. It has a CRE portfolio valued near $4.7 billion, with more than 5.1 million square feet of commercial properties and 25,000 apartment units nationwide.
That includes 12 multifamily properties in Florida following this acquisition. The company also invests in retail, office and industrial properties, but only owns one other non-apartment property in Florida at the moment.
Harbor Group does not have any more properties under contract in Greater Orlando set to close before the end of this year, but will continue looking for newer Class-A product in 2018, Litton said.
"In 2018 we hope we can have similar success investing a couple hundred million dollars in similar Class-A product, and we remain bullish on that strategy including Orlando," he said.