UPDATED: NOVEMBER 30, 2017 11:09 AM — Miami-based commercial real estate investors the Fifteen Group paid $68.65 million on Tuesday for the 384-unit Patterson Court Apartments in Orlando's tourism corridor, which comes with the benefit of a master lease from the area's largest employer.
The deal was a joint venture between affiliates of Fifteen and San Francisco-based hedge fund sponsor Meritage Group LP.
Located at 8151 Patterson Woods Dr., based just southeast of Vineland Premium Outlets with frontage along S. International Drive, the 21-acre property features 16 three-story apartment buildings dating to 2008.
Marketed as a value-add opportunity by Orlando's HFF office, the property is master-leased to The Walt Disney World Resort for its college internship program, which pays all leasing, management and operational expenses, including real estate taxes and insurance.
The deed was recorded Thursday morning in Orange County, with no corresponding mortgage. The sale price reflects a value of $178,776 per unit.
The value-add potential lies in the event that Disney does not exercise its lease renewal option in 2023, per HFF, which includes two additional five-year options. The property could be converted then to conventional multifamily rental or a condominium.
The seller US Lstar I LLC, an investment vehicle managed by USAA Real Estate Company, which previously paid $67.25 million in October 2010.
The acquisition appears to be Fifteen Group's first in Greater Orlando, and follows a prominent $37.25 million sale in July by the company of a 1.2-acre core infill site in the heart of downtown Miami home to a FedEx last-mile distribution center.
Executives with the company did not respond to requests for comment on Thursday.
From 1996 to 1998, Fifteen Group acquired approximately 20,000 apartment units, primarily in California, Florida and Texas, according to its website.
The company's acquisition interest includes value-add multifamily, income-producing real estate and land in select major U.S. markets. In 2004, Fifteen Group branched out into development, with a focus on mixed-use and transit-oriented projects.