Starwood REIT buys Sanford mixed-income apartment complex as part of $461M portfolio deal

Starwood Real Estate Income Trust just paid about $33.2 million for a mixed-income apartment community in Sanford.

The 184-unit Hatteras Sound complex at 13000 Island Bay Circle traded hands for about $189,900 per unit. The deal is part of a larger $461 million portfolio deal executed by the REIT, which is managed by Miami Beach-based Starwood Capital Group.

The Southeast Affordable Housing Portfolio contains 3,336 units located in 18 communities throughout Florida, North Carolina, Virginia, Arizona, and Colorado.

In its entirety, the portfolio is made up of affordable housing garden-style apartment communities funded by Low Income Housing Tax Credits.

Starwood Capital defines the communities to be located in “growing markets” where Starwood already has a significant presence. The company states the affordable housing complexes are stabilized with “strong in-place cash flow;” and proven potential for future rent growth.

Median incomes, which impact allowable affordable housing rents, have grown 6.5 percent across the portfolio’s markets over the past two years, according to data used by Starwood.

Hatteras Sound was built in 2001 by a partnership between affiliates of CED Capital Holdings and affiliates of the real estate investment firm Lakeside Capital Advisors. In 2018, the ownership interest of the Initial partnership was assigned to Lakeside Capital.

The community consists of apartments with up to four bedrooms. Amenities include a pool, community center with a fitness room and business center, and an on-site after school program location. A majority of the apartments are rent-restricted but some units do not have restrictions.

Earlier this year, the REIT purchased several affordable housing projects in Central Florida as part of the same portfolio deal.

Those properties include the 252-unit Falcon Trace apartment complex at 1635 Peregrine Falcons Way, which sold for about $51.4 million, and the 300-unit River Reach Apartments at 1628 River Reach Dr., which the company paid $44.6 million for in February.

The portfolio also includes the Vista Haven apartment community built in Seminole County in 2000. According to records, the REIT paid $58 million for the 336-unit rental complex.

Starwood is known to invest heavily in Central Florida. In 2018, it purchased a 13 low-income housing communities in the Orlando market as part of a $600 million portfolio deal across 28 properties in Florida.

Starwood’s investments aren’t limited to affordable rental housing. In October, SCG paid $86 million to acquire a 278-unit luxury apartment building in Winter Park’s Ravaudage community.

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