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Atlanta apts investor pays $32M to enter Orlando market, seeks more Class B/C

The Park at Sutton Place Apartments, located east of Winter Park on Sutton Place Boulevard.
The Park at Sutton Place Apartments, located east of Winter Park on Sutton Place Boulevard. (The RADCO Companies)

Atlanta-based developer and multifamily investment firm The RADCO Companies paid $32.1 million on June 1 to enter the Orlando market, buying the 288-unit Park at Sutton Place Apartments in Winter Park. The company will invest up to $4 million more on renovations, and is seeking value-add B and C class assets in the region, founder and CEO Norman Radow told GrowthSpotter.

Located at 3935 Sutton Place Blvd., the 30-year-old Class B property lies on 26.5 acres, with one- and two-bedroom floor plans that average 888 square feet. The community is within a mile of Full Sail University.

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RADCO will re-brand the property as Lakeside at Winter Park, which will be managed by affiliate RADCO Residential. The group paid $111,458 per unit.

It's RADCO's first apartment community in Orlando and fourth in Florida, with three others concentrated in the Clearwater-Tampa market. The company owns more than 15,000 multi-family units across eight states and 11 cities in the southeast and central United States.

"RADCO targeted Lakeside at Winter Park for its location as one of the most desirable, affluent, and supply-constrained sub-markets within all of Orlando," Radow said. "The nearby colleges and universities, especially its access to Full Sail University was a huge driver for us."

Plans to invest more than $3.7 million in capital improvements to the property in the coming year include modernizing units, renovating the clubhouse and other amenity areas, adding a rock climbing wall in the fitness center, and transforming the current outdoor spaces to add grilling areas, a fire pit and seating nodes.

"Overall, the property is in good physical condition, but lacks the impactful curb appeal and amenities necessary to compete with well-renovated product in the area," Radow said. "We intend to invest heavily to make the property the most attractive in the sub-market."

Looking forward, RADCO plans to be major players in the Orlando market, seeking more value-added multifamily real estate buy opportunities.

The company targets under-performing assets that offer a significant "mark-to-market" opportunity, and seeks strong cash flow properties in excellent locations when it has attractive debt to fund acquisitions, Radow said.

"We specialize in turning around diamonds in the rough," he said. "This all boils down to identifying undervalued B and C class assets in Class A locations throughout the Orlando area that we believe we can turn into community-improving success stories."

RADCO financed the purchase and upcoming renovations via private capital and a $28 million mortgage from BBVA Compass. The deal was brokered by CBRE Inc.'s Orlando office.

The seller was an affiliate of Tampa-based Blue Rock Premier Properties, LLC, which had bought the property in May 2011 for $18.18 million. This was the company's second local asset sale in the past week, after it sold the 344-unit Park at Cambridge Apartments to Avesta Communities for $30.1 million.

Blue Rock Premier Properties was only formed in February, having acquired control and management of a $700 million Florida apartment portfolio from Blue Rock Partners, LLC. The company now owns 28 properties across the state, with eight in Greater Orlando totaling 1,728 units.

Have a tip about Central Florida development? Contact me at bmoser@growthspotter.com, (407) 420-5685 or @bobmoser333. Follow GrowthSpotter on Facebook, Twitter and LinkedIn.

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