A Dallas-based real estate investment and management firm has added another property to its portfolio of multifamily communities in Central Florida — the third acquisition in the last six months.
Knightvest Capital bought the 230-unit Heritage Estates for $34.3 million, or $149,130 per unit, from Philadelphia-based CenterSquare Investment Management. The deal included purchase of about 10 acres of vacant adjacent land for $5.98 million which the company said is mostly wetlands it currently has no plans to develop. According to the deeds, the transactions closed Jan. 15.
The company financed the purchase with a $49.3 million loan from New York City-based SDF Reit Holdco, a subsidiary of Nuveen. Knightvest is planning to spend about $7 million renovating the property it has renamed The Palmer.
The garden-style apartment community is located at 11701 Heritage Estates Ave. just east of Orlando in unincorporated Orange County. The community was built in 2003 and features nine floor plans with units having between one and three bedrooms averaging 1,158 square feet, according to Chicago-based JLL Capital Markets. JLL represented the seller and helped the buyer secure financing.
The property offers amenities including a resort-style pool, 24-hour fitness center, clubhouse with entertainment lounge, and a dog park with pet washing station. Residents can choose between optional private balconies or patios, with detached garages available for rent.
Jason Dallas, managing director at Knightvest, told GrowthSpotter on Friday that the company is pleased with its latest acquisition as well as the Orlando area’s east and southeast submarkets. The company now owns 1,535 units in Central Florida.
“This vintage deal and this deal profile fit with what Knightvest does best,” Dallas said. “We like pro-business growth states and growth cities.
“Orlando has just been obviously on fire for a long time and it continues to lead large MSAs in terms of population growth and job growth.”
He said the company looks to buy properties that are 20 to 25 years old with a value-add story and attributes that are difficult to replicate now. The Palmer fit that bill because it’s a low-density property with all two-story buildings and large common-area amenities that are dated, he said, which allows the company to come in and do renovations to bring it up to today’s standards.
Knightvest is planning renovations across the property that will take about two years to complete, Dallas said. Unit renovations will take place as vacancies occur.
He said about 40% haven’t been renovated before and will get extensive upgrades (up to $30,000 per unit) including new floors, countertops, appliances and bedroom carpet; full repaint; custom closets; and complete bathroom renovations. The remaining units, which were renovated about eight years ago, will get a basic refresh including new flooring and paint.
The company also plans to redo the leasing office, clubhouse and fitness center. Dallas said the fitness center hasn’t been touched in about 20 years so it will get a complete update that will open the space up and include all new equipment.
“It’ll look like a brand new property,” Dallas said.
The Palmer is the third acquisition by Knightvest in the metro Orlando area since July — bringing its Central Florida portfolio to five — and although it has no properties currently under contract, he said “we’d like to keep adding.”
In July the company bought Cortland Vera Sanford, a 332-unit community built in 2018 now known as The Walton. Knightvest paid Cortland $72.6 million, or $218,674 per unit.
Then in September it bought Brickstone Maitland Summit, a 272-unit community built in 1998 now known as Dawson Apartments. Knightvest paid Reventage $51.95 million, or $190,992 per unit.
Its first purchase in the region was the 326-unit SteelHouse Orlando apartments in the North Quarter district of Orlando at 750 N. Orange Ave in April 2022. That was followed in May 2022 by acquisition of the mixed-used development in downtown Orlando at the corner of West Gore Street and South Orange Avenue formerly known as Novel Lucerne. The property at 733 Main Lane with 375 apartments and 31,000 square feet of retail space is now called Ridley on Main.
The Knightvest website states that since its founding in 2007 it has invested over $10 billion to acquire over 60,000 units across high-growth metro areas in Texas, Arizona, the Carolinas and Florida to become one of the largest apartment owners in the nation.
Brian Bell can be reached at bbell@orlandosentinel.com. Have a tip about Central Florida development? Email Newsroom@GrowthSpotter.com. Follow GrowthSpotter on Facebook and LinkedIn.