Sarasota Apartment Complex Sells for $73 Million

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By John Hielscher, Staff Writer, Sarasota Herald Tribune, Posted January 27, 2020

It marks one of the highest multi-family prices in recent years.

A real estate investor paid $73 million last week for a newly opened apartment complex in south Manatee County.

The 324-unit Oasis at Sarasota was acquired by The Praedium Group, a privately held real estate investment firm in New York City.

It marks one of the highest prices recently paid in the Sarasota-Manatee multi-family property market, which has attracted investor dollars from across the country drawn by rising demand and escalating rental rates.

Opened in mid-2019, the Oasis at Sarasota contains 12 three-story garden style buildings with a mix of one-, two-, and three-bedroom units ranging from 802 square feet to 1,319 square feet. Rents were set at $1,240 to $1,920 per month when it opened.

The 26-acre property, at 2800 Telluride Loop just north of University Parkway and east of U.S. 301, sits in an area that has boomed with residential and commercial growth.

“Further, there appears to be a migration occurring within Sarasota, with tenants moving from downtown Sarasota to its suburbs, in order to escape the increased congestion,” said Chris Hughes, a principal of Praedium.

Unit interiors have nine-foot ceilings with crown molding and granite countertops. Community amenities include a clubhouse, dog park and a beach-entry swimming pool.

The property was developed and sold by the Picerne Real Estate Group of Altamonte Springs, Illinois. Last year Picerne paid $4.06 million for 11 acres where it is building a 254-unit rental community called Oasis at Lakewood Ranch. The property is at the southeast corner of Lorraine Road and 59th Avenue East, next to the site of a future Publix store.

The Sarasota-Manatee region has seen a surge in new rental multi-family construction in recent years. In and around downtown Sarasota, for example, more than 1,800 apartment residences have been added in the past three years.

And existing communities have been hot sellers. Last month an out-of-state investment company paid $42.1 million for The Lexington Apartment Homes, a 267-unit, garden-style community on Beneva Road in Sarasota. In October the 270-unit Eden Pointe Apartments in Bradenton sold for $30.75 million to a Massachusetts company, and a month earlier the 252-unit Preserve at Riverwalk fetched $46.4 million from an investor in Indiana.

Locally, other big sales in the last two years include $43 million for the 224-unit Summer Cove apartments in southern Manatee; $110.5 million for the 900-unit Carlton Arms of Bradenton; $76.1 million for the 360-unit Echo Lake apartments in Lakewood Ranch; $70.5 million for the 392-unit Yacht Club at Heritage Harbor; and $70.5 million for the 172-unit Tuscany Apartments in Sarasota.

Praedium says that since 1991 it has completed over 370 transactions representing $12 billion of capital. It has sponsored a series of 10 private equity funds, along with several separate investment vehicles.

BRENT LEATHWOOD, MBA

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3 Big Mistakes Buyers make:

  1. 1. NOT KNOWING THE NEIGHBORHOOD...ContinuedReal estate always has been and always will be a local business. Know your neighborhood is a cardinal rule in this business. A real estate professional knows what is going on in their local market area. Hire a knowledge, local professional. When we see folks wandering around with a notebook and a list of questions, we know they are the most likely to make a costly mistake. A PROFESSIONAL Realtor, (please note the word professional), can spend 15 minutes listening to your needs and wants, and probably rule out 90% of the local market options, and focus your attention, on the 3 or 4 or 5 communities that will meet your needs, and make sense from both a financial and lifestyle point of view. I am amazed at how many people from out of State, go it alone, end up buying in the wrong community, and come to regret it. I meet people like this everyday, and everyone single one of them will say to me: “I wish we had met you first.”
  2. 2. GETTING STUCK IN AN HOA NIGHTMARE...ContinuedHome owners association nightmares are the stuff of legend in our State. Do not buy the wrong property in the wrong community. A knowledgeable real estate professional can explain to you upfront, the ins and outs of the HOA regulations of the community you are considering, and help you avoid 99% of these potential pitfalls. This is another very costly mistake.
  3. 3. THINKING YOU DO NOT NEED A REALTOR WHEN BUYING A NEW HOME...ContinuedEverybody knows you need a Realtor to represent you, when buying a resale home. Many do not know, you also need a Realtor to represent you, when buying a new home. The new home sales person in the model home works for the Builder, not the Buyer. They are paid to look out for their employer’s interests, not yours. You will not save $1 by going it alone. You will lose money. A lot of money. One of our largest local builders reported 872 annual sales, of which, 762 were handled by Realtors representing the Buyer. That is 87% of the total. The Builder has already factored paying a finder’s fee into the price. The Builder will not rebate $1 of this money back to you. Builders laugh under their breath, when Buyers try this negotiating tactic, even though they will politely agree with you. Professional representation costs you $0, why would you fend for yourself, in a market you know almost nothing about? Buyers know less than 20% of what they actually need to know, to get a great deal. Having gone through the new home buying process hundreds of times with clients, we know all the pitfalls to avoid, and how to make the process go smoothly. Do not go it alone, get professional representation, it costs you $0. Not doing this is the most costly of the 3 mistakes. But everyone has heard the old saying, you can lead a horse to water. We are in the business of helping our customers solve a problem. Our ability to do that, is the sole reason we have a thriving business. We are here to help you through the entire process, and get a great deal.

4 Big Mistakes Investors make:
  1. INCOME... ContinuedThe rental income does not justify the $/sq. ft. purchase price.
  2. EXPENSES... Continued The monthly expenses are too high, relative to the property type and rental income produced.
  3. CAP RATE... Continued The capitalization rate is too low to justify the investment.
  4. HOA REGS... Continued The home owners association regulations are too restrictive, or do not permit the intended use. Frequently overlooked or glossed over by some sales people, the long run financial consequences are catastrophic if a mismatch occurs.
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