Residential Cottonwooda Salt Lake City-based multi-family REIT, paid $85 million to expand its Florida portfolio with the recently completed Addison in Clermont.
The 230-unit community is located at the intersection of Hooks Street and Citrus Tower Boulevard and was developed by ContraVest in 2019. It was one of the last multi-family projects to receive permits before the City of Clermont did not enact a moratorium which interrupted the construction of new apartments. until the end of 2020.
The selling price breaks down to nearly $370,000 per unit. The acquisition marks Cottonwood’s sixth asset in Florida and the first in Central Florida. The REIT also acquired properties in Tampa, St. Petersburg, Pompano Beach and West Palm Beach.
Floor plans at the Clermont site range from 730 to 1,449 square feet and include amenities such as a resort-style pool with cabanas, poolside grill, and fireplace, as well as multiple fitness studios with Fitness on Demand and a bark park with grooming station. The community features a mix of garden-style apartments and shed units with updated finishes, such as ceramic stoves, custom pantries, walk-in showers and showerheads, and hardwood floors. ceramic tiles in all bathrooms.
ContraVest president Steven Ogier had used HUD-guaranteed financing from Greystone Servicing to develop the project, and Cottonwood assumed the outstanding mortgage debt of $35.5 million.
“When you go for HUD funding, there are usually a lot more hurdles before you get to the finish line,” Ogier said ahead of the build. “You get a bit higher loan-to-cost ratio, and that’s a falling interest rate.”
Ogier told Jamie May of JBM Institutional Multi-Family Advisors marketed the property to buyers who would accept debt assumption. As the Federal Reserve has raised interest rates this year, the deal has become even more attractive to buyers. “We were under contract four or five months ago, but we had to wait for HUD to approve the hypothesis,” he said.
The sale comes at a time when two new Class A apartment communities on Hooks Street are applying for permits. These include Clermont Hills, a proposed 312-unit Skorman Construction community on the southeast corner of Hooks and Excalibur Road, virtually across from the Addison property. Just down the road, AC Commercial and Woodfield Development applied for a PD amendment that would allow them to build The Vue in Clermont with 289 units on approximately 24 acres north of Hooks Street. Both projects received approval from the city’s Planning and Zoning Commission earlier this month.
The transaction marks ContraVest’s second divestiture in Orlando this year. A deal involving the 266-unit Addison in Lake Bryan, which opened in 2021 near the Disney theme parks, closed on June 17. The buyer, New York-based real estate investment firm American Realty Advisors, paid $101 million — or $380,939 per unit — for the mid-rise apartment community at 12570 Splendid Place. The company also sold its Addison Skyway marina in St. Petersburg this year.
“The good news is absorption is strong. We’re leasing properties as fast as we can build them,” Ogier said. “Even with the high interest rates, I think we’re going to see strong demand in Florida. , and especially in Orlando, for a long time.”
ContraVest is an active developer in Central Florida. The 323-unit Addison Gateway, located at 7200 N. Frontage Rd., just north of Orlando International Airport, began leasing this year.
Addison Longwood’s 277 units in Seminole County are expected to open by winter, according to its website.
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