Ormond Beach-based Lohman Apartments paid $8.525 million on Dec. 5 for the 191-unit Willow Bend Apartments in Northwest Orlando, its second local acquisition in the past five months, and is "sitting on a lot of cash that's ready to move" into new assets in the coming year, a principal with the company told GrowthSpotter.
Located at 4757 Silver Star Road, the 7.7-acre property is based directly east of Evans High School, and features seven two-story buildings that were built in the mid-1970s.
Lohman has been working toward closing the acquisition for the past six months, and was drawn to the property in part due to its proximity to a 190-unit complex just a few blocks east that it bought in early August for $8.08 million.
"Their rental rates (at Willow Bend) were a bit low, so we can add value over time," said co-founder Lowell Lohman, who described the property as Class C multifamily he hopes to elevate to Class B. "We were attracted to Silver Star being a six-lane road with great exposure, and this being right near the Eagle Landing Apartments we bought (in August) will offer economies of scale."
Lohman affiliate Eagle Property Management took over the former Willow Bend last week, is rebranding it to Eagle Bend Apartments, and and will begin a capital improvements plan in the coming weeks focused on exteriors and amenities. Occupancy was above 95 percent at time of sale, Lohman said.
"The property was actually in very good shape," he added. "We'll do some paving, completely replace the pool furniture, replace a chain-link fence around the pool area with a new white fence, and will be converting one of two tennis courts into a new children's playground area."
The Lohman affiliate sourced a $6.82 million loan from Seacoast National Bank to finance the acquisition. The mortgage and deed were recorded Monday morning in Orange County.
Lohman Apartments now owns 567 apartments in Orlando across three properties, and 2,491 units total in Florida.
The company sold six apartment complexes totaling 1,250 apartments in Daytona Beach and Orlando earlier this year to a Miami investor for $63 million.
Lohman is still looking to place roughly half of those proceeds in value-add properties in Orlando, Daytona and Jacksonville, its focal markets.
"We are still sitting on a lot of cash from that six-property sale, and the quicker we get it in new apartments the happier we'll be. We're in major acquisition mode," Lohman said. "We're negotiating now with a party that has 300-plus apartments (in Orlando). We won't close before end of the year, but likely by February."
The company is targeting affordable housing assets (B and C class), and favors value-add opportunities, particularly under-leased properties where their marketing experience can apply.
In 2012, Lohman's family sold Lohman Funeral Homes' 14 funeral homes and cemeteries to Pennsylvania-based StoneMor Partners L.P, and began investing in apartment properties. It was the largest family-owned chain of funeral homes and cemeteries in Florida at the time of the sale.
Michael Donaldson of Marcus & Millichap represented the buyer on the Willow Bend acquisition.
The seller was Willow Bend Apartments LLC, managed by Diana Rodriguez and Gustavo Cucchiara, which previously paid $1.022 million in December 2012.