Chicago investors buy Tampa Bay apartments in $112 million deal
By Breanne Williams
Tampa Bay Business Journal
Published: Sep 24, 2021

Two apartment communities in Tampa Bay have been acquired by Chicago-based 29th Street Capital in a $112 million deal.

The company finalized the sale on Sept. 16 for Henley Tampa Palms in Tampa and Enclave at Northwood in Clearwater; the two properties total 503 apartments. Luis Elorza and Justin Hofford of NorthMarq represented the seller, Preston Giuliano Capital Partners.

“Henley Tampa Palms and Enclave at Northwood represented a rare opportunity for the buyer to not only purchase two value-add assets in highly desirable areas but also to acquire scale in one of the best-performing markets within the nation,” Elorza said in a statement. “29th Street Capital plans to further enhance the properties, repositioning them to compete with best-in-class assets within their respected markets. The ability to capture record-setting organic rent growth in addition to capturing additional rent growth through renovations makes this a great investment opportunity for the buyer.”

Enclave at Northwood sold for $39 million or $207,446 per unit, and Henley Tampa Palms sold for $73 million or $231,746 per unit, according to property records. Henley Tampa Palms is at 15350 Amberly Drive, Tampa, was built in 1997 and has 315 units. Enclave at Northwood is at 2690 Enterprise Road East, Clearwater, was built in 1985 and has188 units.

The sale represented “record-setting pricing within the Tampa Bay MSA for both 1990s and 1980s-built communities,” according to Northmarq.

PGIM Real Estate provided approximately $91.5 million in financing for 29th Street, according to Berkadia, who arranged the debt on the firm's behalf. There is a three-year, floating-rate loan that includes $85.4 million in initial funding, with $6.1 million for future funding for capital improvements to the two properties. The two locations will have their management and leasing handled by 29th Street’s in-house property management group Haven Residential.

“The Tampa metro area has benefitted from a roaring Sunbelt surge,” Brad Williamson, Berkadia Miami managing director, said in a statement. “While the pandemic curbed apartment demand nationwide due to public health lockdowns, the greater Tampa-St. Petersburg bucked the U.S. trend, and leasing activity in the second quarter was nearly double the new supply. This acquisition illustrates the strong investor demand for well-located multifamily assets in the region.”

Berkadia’s Mid-Year Multifamily Report for Tampa-St. Petersburg found that more than $1 billion of the multifamily assets in the metro traded in the first half of 2021. By June, Berkadia's data found the local metro workforce was operating at 98% of its pre-Covid levels and attributed part of that rebound to the growth in the professional and business services in the area. The report said that in the past year alone, the sector’s head count had grown by 9.8%, or by approximately 23,400 net positions.

“Both properties were extremely attractive to the buyer due to their infill locations with high barriers to entry with great connectivity and proximity to employment drivers,” Northmarq's Hofford said in a statement. “Both locations are located within highly desirable areas that will continue to attract quality tenants into the foreseeable future.”