Peachtree Group Lends $35M on Multifamily Buy Near University of Florida
Coastline Management Group has nabbed $34.5 million of acquisition financing for the purchase and renovation of a multifamily asset near the University of Florida campus in Gainesville, Commercial Observer can first report.
Peachtree Group, formerly Stonehill, supplied the three-year, floating-rate bridge loan on Coastline’s newly acquired 312-unit Pavilion on 62nd, a garden-style apartment complex that was previously used for student housing. The loan encompasses 61 percent of the stabilized appraised value of the property, according to Peachtree.
Hollywood, Fla.-based Coastline purchased Pavilion on 62nd for around $40 million from Pierce Education Properties in a deal that closed in December, according to Nisu Mehta, senior vice president at Peachtree. Coastline will use roughly $5 million of the loan proceeds on renovation costs for the 1994-built property, including converting four-bedroom units to three-bedroom apartments, expanding amenities and completing deferred maintenance.
Mehta said the property is in an attractive location given the strong presence of a major university coupled with increased demand for multifamily in Central Florida, given how pricey rents and insurance in South Florida have become in recent years.
“We like the whole narrative of people moving to Florida and specifically Central Florida since it’s a little bit cheaper than going to South Florida,” Mehta told CO.
“South Florida is not just expensive in rent and housing but also insurance, and if you come into Central Florida it will be more affordable with insurance since you aren’t as close to the water,” Mehta continued. “I think you are going to see more migration trends in Central Florida, maybe not at the high income level that South Florida might get but more in the middle-class and upper-middle-class areas.”
Mehta said another attraction to the deal was that the property was bought at roughly half the cost of what multifamily properties were trading at a year or two ago, which enables favorable cap rate conditions.
Located at 1000 SW 62nd Boulevard on 31.74 acres about four miles from the University of Florida, the property last underwent renovations around a decade ago. Its amenities include two swimming pools, workstation cubicles, a game room, a media room, rentable event space, a fitness center, an indoor racquetball, a half-court basketball court, a sand volleyball court and a dog park.
“Based on our previous successes and our unwavering belief in the Gainesville area, we are delighted to do it all over again,” Eyal Mehaber, president and CEO of Coastline Management Group, said in a statement.
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