Orlando-Area Apartment Community Acquired by McCann Realty
- Jun 08, 2012
By Jeffrey Steele, Contributing Writer
This story was originally published in Multi-Housing News, the sister publication to Commercial Property Executive.
Vista at Lost Lake Apartments, a five-year-old, 276-unit, garden-style rental community just outside Orlando, has been acquired by Richmond, Va.-based McCann Realty Partners L.L.C. The property will be managed by Atlanta’s Pegasus Residential L.L.C.
We had been looking in Orlando for the better part of three years, McCann principal and director of acquisitions Brand Inlow told Multi-Housing News. He adds this particular property offered an attractive and distinctively different quality appealing to McCann and a few other potential buyers.
In addition to the existing community, the site features an adjacent parcel that has been approved for 192 additional units.
Like a lot of Orlando properties, this got a lot of exposure, and a lot of interest, Inlow added. Had it not been for the Phase II parcel, it would have drawn 12 to 15 solid offers. But the desire on the seller’s part to sell the properties together narrowed the universe of groups to three to five. We were able to convince them we were the most likely to close. Certainty of execution became a priority for the seller, and that’s what enabled us to acquire the property. The Phase II land is fully entitled; we were able to confirm that with the city of Clermont. Our business plan is to commence construction [on Phase II] before year’s end.
The selection of Atlanta-based Pegasus Residential to manage the property was a logical choice for McCann, says McCann principal Fleet Wallace.
Pegasus manages all our deals, with the exception of four Indianapolis communities we own that are out of their footprint, he says. We’re very familiar with them. They do an excellent job of marketing, bringing traffic to the properties and keeping them full.
Because Pegasus manages numerous Central Florida properties, the company was able to aid McCann in its search for a property to acquire. They brought some operational knowledge to our search for the right property, Inlow says.
Due to our relationship with them, we engaged them early in the process. It gave us a better understanding, helped us be proactive in our underwriting and gave us an advantage we were able to leverage up on.
Vista at Lost Lake Apartments fit ideally with McCann’s philosophy of purchasing communities less than 10 years old. Newer vintage communities lease better, tend to have higher rents, and absolutely have lower capital expenses over a period of time, as opposed to 20 or 30-year-old properties, Inlow says.
Inlow and Wallace report McCann is positioned to acquire four to six properties and start one or two development deals a year, as well as seeking at least one or two more deals in the Orlando area. It’s one of the markets that’s got some traction post recession, and has some job growth and rent growth, Inlow said. We feel like we’re in the early part of the recovery cycle for Orlando.
Of Vista at Lost Lake Apartments, Wallace added: We’re excited to own there. Residents will continue to enjoy great service in a great property.