A 62-and-over affordable housing community overlooking Lake Lucerne in downtown Orlando has been owned and managed for 50 years by a local nonprofit organization.
That changed this week when the Kinneret Council on Aging, realizing it couldn’t afford the costly, yet necessary repairs to the aging property, sold off the twin 15-story residential towers and its 280 combined units to a national multifamily company based in New York for $57.1 million.
Following the transaction, Fairstead vowed in a news release to preserve the apartment’s affordability and embark on an $18 million renovation project.
Meanwhile, the Kinneret Council on Aging, founded by members of the Jewish community, will continue to provide services to the apartment complex’s residents, including a food pantry, exercise programs, Jewish holiday activities and more.
The nonprofit’s board of directors “made the difficult decision” in 2021 to pursue buyers for the Kinneret Apartments at 515 Delaney Avenue, according to a news release published at the time.
“The Kinneret Board has decided that the best path forward for a sustainable future supporting Kinneret’s mission of caring for those who cared for us, is to sell the property to an experienced affordable housing owner,” Rhonda Pearlman, Kinneret Board President, said in a statement at the time. “The new owner will have greater capacity and access to capital for building rehabilitation.”
The board made clear their expectations for the new owner.
“The property will be strategically marketed to those affordable housing owners who will commit to significant rehab and modernization for building and system upgrades while preserving the affordable community in place and ensuring the safety and security of all residents,” the release added.
Fairstead, which owns more than 17,000 apartments in 18 states, closed on the side-by-side apartment communities on September 23, according to county deed records.
At the time of sale, the asset was 98% occupied.
With ownership of the Kinneret Apartments, Fairstead will get to work on modernizing the two towers, which were built in 1969 and 1979.
The rehabilitation will include façade and roof repairs, new flooring, senior-accessibility upgrades, and common area improvements. Modern kitchens and bathrooms will be installed in every unit with new energy-efficient appliances, lighting, and plumbing fixtures, according to a news release following the sale.
Affordable rents will be preserved at the buildings, with residents continuing to pay no more than 30% of their income towards rent, the release says.
The 280 homes serve seniors with a maximum yearly income of $32,100 (between 40-60% of the area median income).
“Fairstead is excited to continue expanding in Florida and we look forward to preserving this critical, high-quality housing for seniors in Orlando,” Fairstead CEO Jeffrey Goldberg said in a statement. “The Kinneret Council on Aging has created a wonderful community for seniors to age in place with access to health care services and fun, engaging events. Fairstead is honored to be selected as the steward for this important property, and to continue our work with the Kinneret Council to serve our seniors. We will invest in upgrading these homes, continue its important focus on community, and improve quality of life.”
Leaders with Kinneret Council on Aging said in a statement they’re thrilled” with the new owner’s plans.
“When we found Fairstead, we knew we found a buyer with a similar vision,” Pearlman said. “Now we are passing the torch to a company that will continue to enhance these residents’ lives, and we will continue to be a part of that legacy as we provide services that are so important to leading an active, healthy life.”
With money from the sale, the nonprofit plans to expand its offerings to residents of the community
U.S. Bank Trust provided $47.9 million in permanent lender financing plus another $5.3 million in gap financing.
The property is within walking distance to the Beardall Senior Center, a recreation facility and community center for seniors in the Orlando area, offering a variety of activities and classes such as bingo, bridge, sewing, studio art, Tai Chi, embroidery, and more.
Amenities at the properties include a community room with an accessible kitchen, computer lab, beauty salon, library, boutique, laundry facilities, emergency mobile call button pendant system, controlled-access entry, elevators, storage, and a service coordinator.
With this acquisition, Fairstead now owns and operates 11 properties totaling more than 1,700 units across the state of Florida. Earlier this year, Fairstead celebrated the completion of renovations at Sweetwater Square in partnership with Alachua County. The rehabilitation of the fully affordable development preserves 200 homes. In December 2021, Fairstead announced the acquisition of the Sable Palms Apartments in Jacksonville.