Jacksonville-based multifamily owner-operator Michaelson Real Estate Group spent a combined $28.6 million in the past two weeks on two new Orlando assets, and has another four local properties under contract, the company's chairman and CEO told GrowthSpotter.
A Michaelson affiliate paid roughly $17.93 million on Wednesday for the 216-unit The Grove apartments, and sourced a $13.1 million balloon mortgage with adjustable rate from Fannie Mae via Walker & Dunlop, which will come due in February 2019.
Located at 2316 Conway Road, the 9.52-acre property features 16 two-story apartment buildings, dating to 1973. The asset was 95 percent occupied at time of sale, and neighbors the 200-unit Park at Salerno apartments that Michaelson and investment partner Goldelm bought in March.
"We plan on doing interior and some exterior rehab to the asset, and should invest about $3 million over the next (12 to 18 months)," said Michael Moses, chairman and CEO. "Our goal is to move rents from $1.06 per square foot to $1.37 per square foot in the next five years."
The seller was an LLC affiliate of Dr. Luis Cruz and Solange Botbol, who hold multifamily investments across the state and previously paid $15 million for the property in 2006.
The second recent acquisition was more than $10.68 million paid on June 30 for the 151-unit Reserve at Lake Buchanan apartments, which has been rebranded as Royal Springs.
Located at 1701/1717 Holden Ave., the 13.22-acre property has 11 two-story apartment buildings dating to 1970, and was 97 percent occupied at time of sale.
Insight on the rich history between buyer and seller over the past few months, and the aggressive positions of both to acquire in 2017.
By Mike Salinero
Jan 11, 2017 | 6:15 PM
"We'll be doing interior rehab of the kitchens and bathrooms essentially," Moses said. "Rents are at $0.86 per square foot, and we expect to achieve up to $1.03 per square foot within five years."
The seller there was an affiliate LLC of New York-based Axonic Capital, managed by Jonathan Shecthman, residential assets portfolio manager, which previously paid just under $8 million in April 2016.
Michaelson Real Estate Group was involved in 26 multifamily transactions last year, and so far this year has closed on 23 apartment communities, 18 of which are in Florida.
The company has 12 more deals currently under contract, four of which are in Greater Orlando, Moses said.
Michaelson has been sourcing Freddie Mac and Fannie Mae loans for its acquisitions, leveraging up to 80 percent and supplying the rest through its own equity and that of private equity partners, Moses added.