Multi-Family Residential Developments

NY-based affordable housing investor has Orlando's Timber Sound under contract

An affiliate of New York-based affordable housing owner and developer Lincoln Avenue Capital has the 240-unit Timber Sound Apartments in southwest Orlando under contract, which would be its second asset in Greater Orlando.

Located at 4903 and 4897 Raleigh St. north of Eagle's Nest Park, the property's two phases cover 20 acres, with 27 two- and three-story buildings that date to 1997 and 1998.


The prospective sellers are two affiliates of Kissimmee-based Leland Enterprises, Inc., a full-service LIHTC property manager that manages Timber Sound, and acquired it after the LIHTC 15-yar compliance period ended.

"We did not have this listed, ... but Lincoln came to us through a real estate broker we had used for some of our student housing properties we sold in Louisiana and Mississippi, and the offer they made was an attractive one," Leland co-founder Ken Dixon told GrowthSpotter. "The offer also obligated (Lincoln) to continue leasing to affordable housing tenants, so everything lined up well for us."


The property's appraised value as of late February is $30.5 million, according to a summary provided to city council members, but that price likely reflects market-rate potential. The contracted sale price is less than $20 million, with closing projected for late August.

The property qualifies for Low-Income Housing Tax Credits, is currently 98 percent leased and maintains a waiting list, according to a summary provided to Orlando's City Council for a July 24 meeting.

In October 2013, the city of Orlando entered into a $681,000 HOME loan agreement with Leland's affiliate Timber Sound, II Ltd., for the rehabilitation of 75 units at the property.

Following that, the owner requested more HOME financing through the city for a second renovation phase on 80 units in September 2014, when it received another $710,900.

This type of loan is forgiven after a set number of years if the owner continues to lease as low-income housing. The city is still owed just over $1.39 million on the loans.

As part of Lincoln Avenue Capital's purchase contract, its buyer affiliate has asked the city to transfer the outstanding HOME loans and agreement to it. The HOME loans and restrictive covenant are set to expire in November 2020.

Lincoln Avenue Capital's affiliate is financing the acquisition with a HUD-insured 223(f) mortgage of approximately $19.45 million over 35 years. As insurer, HUD requires the city to subordinate its loan position.

Executives with the buyer did not respond to requests for comment on Thursday.


Affiliates of Lincoln Avenue Capital appear to also own the Logan Heights affordable apartment complex in Sanford, based on records with Florida's Department of State.

Leland Enterprises will be looking to reinvest the proceeds of its sale to fulfill a 1031 exchange opportunity, and is open to a range of multifamily and commercial properties, Dixon said.

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