"Multifamily has become a core investment class primarily due to ongoing strong demand and rental rate growth. Multifamily, as an asset class, is more protected against downturns than any other asset class, making it a safe investment as the cycle matures," said Bradley Coe, senior director multifamily investment services for Colliers International.
"Generally speaking, the multifamily market might experience subtle shifts over the course of a cycle but those shifts do not compare to the impact felt by investors in other property types," he said.
The top apartment community sale was the 306-unit Ravella at Town Center, which sold at $67.75 million for a Northeast Florida record of $221,421 per unit.
Built in 2018, the 5.58-acre community at 4674 Town Center Parkway is near shopping, entertainment and restaurants at St. Johns Town Center, The Strand at Town Center and Town Center Promenade.
It is near the University of North Florida and access to the Beaches and Interstate 295.
Ravella at Town Center features some of the latest trends in apartments.
The second-largest apartment sale was the 520-unit Park at Anzio Apartment Homes on 36.53 acres at 4083 Sunbeam Road near Beauclerc.
It sold for $63.5 million, or $122,115 per unit. Built in 1983, the community last sold in 2016 for $36 million, $69,230 per unit, which is a 76% increase in three years.
Steele Creek apartments, built in 2017 at 8599 AC Skinner Parkway, sold for $63.4 million, or $211,333 per unit.
The 300-unit apartment community, on 14.72 acres, is within the Butler corridor about 1.5 miles from the St. Johns Town Center.
Century at Bartram Park apartments, at 13525 Bartram Park Blvd., sold for $57.75 million, or $178,792 per unit.
Built in 2007, the community comprises 323 units on 19.65 acres and last sold in 2013 for $38 million or $117,647 per unit. That is 52% increase in six years.
The 440-unit St. Johns Forest Apartments at 7925 Merrill Road in Arlington sold for $55.6 million, or $126,363 per unit. Built in 1989 on 40.06 acres, the apartments last sold for $37.95 million in 2016 or $86,193 per unit, for a 47% increase in three years.
Mezza apartments at 11701 Palm Lake Drive, east of North Main Street and Interstate 295, sold for $55 million, or $125,000 per unit.
The 440-unit community, built in 2008 on 31.05 acres, last sold in 2011 for $33.4 million or $75,909 per unit. That was up 65% in eight years.
Integra River Run apartments at 14050 Integra Drive in North Jacksonville near UF Health North sold for $54 million, or $180,000 per unit. The 300-unit Integra was built in 2017 on 18.11 acres.
Coe said, the rise in unit pricing for the older properties “likely reflects the presence of a strong value-add opportunity” based on the age of those properties.
That means investors can make improvements to update the properties and then raise rents.
“The ability to capture sizable rental rate gains on unit and property renovations at those properties will result in greater income gains, which in turn, drives per unit pricing and cap rate compression,” Coe said.
The cap rate, or capitalization rate, indicates the rate of return generated on real estate investment property.
By: Scott Sailer