First Horizon Lends $51M on TerraCap South Florida Apartment Purchase

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TerraCap Management has secured $51 million in debt from First Horizon Bank to help finance its purchase of a new, 240-unit multifamily development in Bonita Springs, Fla., Commercial Observer has learned. 

The debt facilitates TerraCap’s roughly $70.4 million buy of Versol Apartments at 28790 Versol Drive in Bonita Springs from Indianapolis-based residential developer and operator, Milhaus, who will stay on to manage the property, according to information from TerraCap.

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Newmark’s Matthew Williams and Kyle Schlitt worked on behalf of TerraCap to source, arrange, and ultimately complete the financing for the purchase a little over two weeks from application. Schlitt said his team experienced a very competitive marketplace, which allowed them to quickly lock in “aggressive financing terms for [TerraCap] as they acquired a premier asset in an expanding submarket within southwest Florida.”  

Versol was built last year and is already 100 percent leased out, according to information released by TerraCap. It sports studio, one-, two- and three-bedroom residences that average 1,094 square feet in size, the largest average floor plan size for rental units in the area, per Newmark. 

The development is situated on 27 acres and includes a clubhouse building, with a “chef-inspired” catering kitchen, a conference room and a coffee bar. The site also has a swimming pool with a sun shelf, which is a flat, shallow area at the entrance of a pool. There’s also a fitness center, a spin studio and yoga room, an outdoor kitchen area with gas grills, an entertainment area with a fire pit, a bocce court, a dog park and dry cleaning services, according to Newmark and information from the property’s website. 

“Versol being new and in the heart of Southwest Florida was of great appeal to us,” TerraCap founder and Managing Partner Steve Hagenbuckle said as part of the announcement of the purchase. “Its vacation destination location will allow us to offer creative custom leasing programs for full-time and part-time residents as well as tourists. All of this with an eye on value creation.”

Monthly rents at the location range from around $1,600 for studios to more than $2,600 for three-bedrooms units, according to listing information from Apartments.com. The residences range in size from 627 square feet for studios to more than 1,500 square feet for three-bedroom, two-bathroom apartments, according to the property’s website.

Mack Burke can be reached at mburke@commercialobserver.com.