Los Angeles-based TruAmerica Multifamily recently paid $49.7 million for its fifth apartment complex in the Greater Orlando market, with another $4 million to follow this year in renovations, a lead executive with the company told GrowthSpotter.
The investment group bought the 368-unit Astor Park Apartments in Winter Springs on Feb. 15, according to a deed recorded on Friday. It is the company's seventh in Florida since entering the market nine months ago.
TruAmerica, which specializes in value-add properties, now has 2,600 units in the Sunshine State, which is now its third largest investment market.
TruAmerica managing director Matthew Ferrari told GrowthSpotter the Astor Park property was attractive because it is in a desirable suburban location that is close to employment centers.
"It's in a nice setting in a neighborhood with strong single-family home prices and its 30 minutes to downtown Orlando, Lake Mary and Central Florida Research Park," said Ferrari, who heads TruAmerica's East Coast operations.
"It's also very walkable to grocery-anchored retail and boasts strong schools."
The sellers in the Astor Park transaction were The Prestwick Partners LLC, a company headed by Miami Lakes lawyers Michael Cosculluela and Daniel J. Marzano, which previously paid $42 million in March 2006.
As part of the deal, TruAmerica assumed two mortgages totaling roughly $34.6 million. The secured party is the Federal National Mortgage Association, or Fannie Mae.
The company felt it got a good deal on the price of the complex, which will allow it to invest $4 million in renovations without having to raise the rent much, Ferrari said. The apartments were built in two phases, 1986 and 1998, and feature a mix of one-, two- and three-bedroom units.
"We were able to buy Astor Park at a strong discount to replacement cost," Ferrari said, "and after we factor in investing capital into the property to renovate, we will still have a (cost) basis lower than the cost to build apartments in this submarket."
ZRS Management was brought on to the property within the past week as new property manager. The previous owner self-managed.
Some of the planned improvements include new stainless steel appliances, stone countertops, new cabinet faces, upgraded lighting and plumbing fixtures, vinyl plank flooring and tile backsplashes.
The company also plans to plant new landscaping throughout the complex, paint the buildings' exteriors, and improve the fitness center and pool furnishings.
Plans are to start renovating the amenities, exterior and apartment interiors within the first 30 days of ownership. The amenities and exterior projections will be completed in the first 12 to 18 months. The interior upgrades will be implemented over two years.
The company has connections with general contractors in the area, but there will be plenty of opportunities for subcontractors, Ferrari said.
TruAmerica has now purchased five multifamily communities in Greater Orlando since May 2017. In January, the company paid $52.75 million for the 362-unit Central Park Apartments in Altamonte Springs.
Other purchases: the 300-unit Arium Falcon Pines in Orlando last October; and the 348-unit Highpoint Club in Orlando and Montevista at Windermere with 360 units, both last May.
Citing U.S. government statistics that show Orlando leading the nation in job growth, Ferrari said the company may not be finished buying in this area.
"We have five assets in the market which allows us to leverage our construction management capabilities so we are able to renovate at a reasonable cost," he said. "This keep our cost basis low, allowing us to obtain a strong return on our capital investment."