The 320-unit apartments recently acquired, located at 4000 Middlebrook Road just off the 5000 block of Conroy Road.
The 320-unit apartments recently acquired, located at 4000 Middlebrook Road just off the 5000 block of Conroy Road. (McKinley)

National multifamily owner-operator McKinley paid more than $43 million on Tuesday for its 12th apartment property in the Universal Orlando submarket along Conroy Road, buying the 320-unit Middlebrook Farms Apartments.

Located at 4000 Middlebrook Road just off the 5000 block of Conroy, the 42-acre property features 16 three-story buildings, dating to 2001.

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McKinley will rebrand the property as Palio Apartment Homes, and start this week on an extensive capital improvements plan, said CEO and co-owner Albert Berriz.

A common outdoor seating area with a nearby barbecue grill space at the newly-branded Palio Apartments.
A common outdoor seating area with a nearby barbecue grill space at the newly-branded Palio Apartments. (McKinley)

"Our upgrade plans have started today and will be executed over the next few months," he said. "We'll do unit interiors, enclose patios and a complete makeover of all amenities."

The seller was an affiliate of Illinois-based Stoneleigh Companies, a multifamily-focused investor and developer, typically doing business through affiliate Waterford Residential.

Stoneleigh previously paid $31.68 million for the property in February 2013. Greystar was the former property manager, replaced this week by McKinley's management affiliate.

McKinley adds 9th apartment community near Universal to portfolio for $25.5M

Details on the owner-operator's growing portfolio in Orlando, what renovations it has in store, and where it may invest next.

The property was marketed for Stoneleigh by Shelton Granade of CBRE, who introduced the listing to McKinley four months ago after doing several deals with that buyer in the past.

"We know how much they like that part of town so we introduced it to them early, but we also took it to market and got a lot of interest from a variety of groups," Granade said.

"Stoneleigh may look to reinvest in this market, they like Orlando a lot and have considered other properties and development deals here," he continued. "Their sale here is no indication of any concern with the Orlando market. They just saw an opportunity for a nice return after investing in the property for four years."

The property is "emptier than it should be," said Berriz, who declined to cite an occupancy level at time of sale. Value-add opportunity exists for McKinley through the upgrades, lease-up efforts, and its dominance of the apartment submarket near Universal Orlando.

McKinley now owns 57 apartments communities and more than 7,000 units across Central Florida, with 24 in Greater Orlando. Focal submarkets locally are Downtown Orlando, Winter Park, the international airport, and near Universal's theme parks.

McKinley buys 23rd apartment property in Greater Orlando

Details on where the company bought its latest asset, who the local seller was, and what bank financed the deal.

The Universal submarket is a particular strength, with more than 2,500 units across McKinley's 12 properties that run along most of Conroy Road. Economies of scale now work in its favor for maintenance staffing among those properties, and buying web marketing keywords for apartment searches in that submarket.

McKinley closed on the new property in less than a month with its own capital, and an undisclosed mortgage from Key Bank.

The deal is McKinley's first in Greater Orlando this year, and follows its November 2016 purchase of a third property in Winter Park.

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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