UPDATED: MARCH 7, 2018 5:06 PM — An affiliate of New York-based investors Gamma Real Estate paid $50.1 million on Wednesday to enter Orlando's multifamily market, and is actively pursuing more Class-A assets across Central Florida, a lead executive with the company told GrowthSpotter.
The company bought the 264-unit Pavilion at Lake Eve apartments, located at 12501 Lake Square Circle, just east of the International Drive intersection with Daryl Carter Parkway. The 9.34-acre property features six apartment buildings of four and two stories, built in 2013.
"Orlando has some of the lowest unemployment in the nation, the largest population and job growth figures in 2017, and its highest annual apartment absorption in its last 13 years, so a lot of macro factors why we like Orlando," said chief investment officer Richard Kulick.
"Then for the micro(-economic factors), average household income at the property is quite high, so we felt very good about the demographic base there."
Gamma is a boutique commercial real estate firm with its own commercial bank, a development business with projects across the country, and a multifamily investment division.
The company owns 11 other assets in its multifamily portfolio, but only one in Florida (Jacksonville). Central Florida has been prioritized as a new investment focus, said Kulick, with the company pursuing a multifamily deal now in Tampa.
"All the STEM jobs Orlando is generating are huge, and we want to continue to follow that growth," he said. "It's not all about oranges and theme parks now when it comes to Orlando."
Lead executives with the company spoke in February at a New York City real estate conference about their new focus on multifamily in the Southeast, which they see leading the country's population growth for decades to come.
The Class A Pavilion at Lake Eve community features a resort-style pool and lounge, outdoor fire pit and grilling station, cyber cafe, pet salon and grooming area, 24-hour fitness and wellness center, billiard room, videogame room, private movie theater, pet park, and quiet library and lounging room. Pavilion at Lake Eve was actively marketed by previous management for long-term executive stays with furnished units.
Looking forward, Gamma will be seeking Class-A multifamily assets in Central Florida that are available below replacement cost, with rents lower than the submarket average and a demographic with the elasticity of income to afford any amenity improvements that may increase rents, Kulick said.
The buyer sourced a $39.984 million mortgage from Greystone Funding Corporation that matures in April 2053.