A big sale of a Jupiter-area apartment project surpassed $200K/unit. And that is for an apartment that rents only to those 55 years old and older.
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Riverwalk Pointe at Mangrove Bay sold to an LLC attached to D.C.-based real estate firm Gelman Management Co. for $26.75M. That puts the price at $257,211/unit. The 104-unit project off U.S. Highway 1 just south of Indiantown Road was developed by Eastwind Development and Index Apartments in 2014.
Cushman & Wakefield Vice Chairman Robert Given, Vice President Calum Weaver, Executive Managing Director Zachary Sackley and Senior Managing Director Troy Ballard brokered the sale.
“The property received a significant amount of investor interest from a broad cross-section of potential buyers due to its location, vintage and size,” Weaver said. “We ultimately went with an out-of-state buyer who was able to move quickly due to 1031 exchange requirements.”
Weaver said developers like Eastwind are finding a lot of demand from investors for their projects once they become stabilized. In Riverwalk Pointe's case, occupancy was more than 95% at the time of the sale. Investors are hungry for core properties in South Florida, where apartment fundamentals have remained strong.
“Since the beginning of this year, we have received more 1031 exchange requests than ever before,” Weaver said. "We currently have five deals contracted with exchange buyers, of which Riverwalk was one.”
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Palm Beach County — where Jupiter is among the cities — is no exception. According to a recent Marcus & Millichap report, tenant demand due to area employment growth is spurring rental rate increases. Last year, nearly 12,000 jobs were added to the county, and this year, that number is expected to top 15,000, according to Marcus & Millichap. That has spurred developers to build more: some 4,500 units are in the pipeline this year, topping the 2,200 units completed last year.
That will lead to a vacancy rise to more than 6%, but despite this, rents continue to climb, with the average expected to exceed $1,500/month in 2017 after a more than 3% increase last year. But the development will be keeping investment brokers busy as developers will be happy to sell off projects once they lease up, Weaver said.
“We've already started to see it occur. And I think going forward, you're going to see more of that,” he said.
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