The sale of a south Orlando apartment complex to an affiliate of Starwood Property Trust for a recorded $33.4 million brings completion nearer for a $600 million multi-family portfolio sale that stretches across Central Florida and reaches into other regions.
The 312-unit Sand Lake Pointe Apartments on Sand Lake Road, about a mile west of SunRail, was built by an affiliate of Orlando-based AGPM in 2002, records show, after paying $2.4 million for the land two years earlier.
Connecticut-based Starwood Property Trust in January closed on three communities, reaching from the Disney area to northwest Orlando area. The deal includes 28 communities with 6,185 in all, with a focus on Metro Orlando, and the Sand Lake Pointe property alone accounts for 5.5 percent of the portfolio value, at about $107,160 per property.
"This transaction is an extension of Starwood Property Trust's previous successful investment in the affordable multifamily housing sector and upon closing our portfolio will consist of over 15,100 units of housing located predominately in Florida," Chairman and CEO Barry Sternlicht said of the portfolio in a January release. AGPM declined comment on the deal, citing a non-disclosure agreement.
In the affordable-housing sector overall, economic conditions have helped keep occupancy high, said Louis Vogt, member/manager at AGPM, which owns or operates about 11,000 properties across the southeastern U.S.
"As a general market condition, our company specializes in affordable housing, and it's doing very well, right now," he said.
Overall, affordable-housing investors have faced financial pressures including rising construction costs or competition to bid on existing properties, Vogt said – as well as being unable to pass those higher costs along to renters, as mainstream properties can. Scale is one way to keep costs down, such as leveraging buying power with vendors and suppliers or prioritizing personnel efficiencies, and AGPM will manage Sand Lake Pointe among the approximately 3,000 units it operates and/or owns in Metro Orlando.
"There are still economic incentives if you build new, and on the buying side it's very competitive," Vogt said. "... And during a rising interest-rate environment, that brings additional pressures."