Sapphire Winter Park Apartments, a 348-unit garden apartment community, became the fourth Winter Park property to be acquired by Ann Arbor, Mich.-based McKinley Companies .
Using affiliates Sapphire Apartments, I and II LLC, McKinley paid $45.5 million for the apartments located at 1743 Semoran North Circle, according to a deed signed Dec. 4 and recorded Tuesday.
The seller was InvestRes, a residential real estate investment group based in Tampa.
The newest acquisition joins Indigo Winter Park, Azure Winter Park and Serena Winter Park in McKinley's multifamily portfolio. The company has been actively owning and operating multifamily investments in Winter Park since 1985, and in Orlando since 1982, according to a company statement.
"Our team has lots of confidence in the Winter Park sub-market and we look forward to bringing Sapphire Winter Park into our McKinley family," said managing member and CEO Albert M. Berriz, in the statement. "This location, as well as the very large apartment sizes available for us to work with, make it a perfect addition to our Winter Park portfolio."
Berriz said McKinley will undertake an immediate multimillion-dollar renovation at Sapphire, which was built in 1970. Upgrades will include new condominium-grade interiors and extensive exterior improvements to amenities and landscaping.
The purchase was part of a complex 1031 exchange transaction that involved McKinley selling a property in Champaign, Ill., and another in Indianapolis, said Harry Collison, senior vice president and managing director for acquisitions and dispositions.
Under the IRS 1031 rule, a business can take funds from a property sale, use them to purchase another property and defer paying any capital gains on those funds.
"In classic McKinley style and effectiveness, we were able to close on the acquisition of Sapphire Winter Park in just 32 days from contract execution," Collison said in the company statement.
Newmark Knight Frank, an international commercial real estate advisory firm, represented InvestRes in the transaction. The firm's senior managing director, Scott Ramey, said in a press release that this sale illustrates the continuing demand for "well-located, value-add properties" in Central Florida.
"There continues to be unprecedented demand for well-maintained, infill assets with value-add potential in Central Florida," Ramey said in the statement. "The highly accessible location of Winter Park Apartments, combined with a low-density site plan and an affluent, high-barrier-to-entry submarket, led to incredibly strong interest in the asset."
McKinley, founded in 1968, boasts $500 million in annual revenues and a portfolio valued at $4.6 billion. The company manages 30 million square feet of commercial and residential real estate in 16 states.
In November the company announced it had purchased Harbor Beach Apartments in Orlando. The company used $68,182,000 in long-term, fixed-rate financing to buy Harbor Beach and Manchester Flats Apartments in Ann Arbor, according to a company statement. McKinley now operates 18 rental communities in the Orlando market.