Signs of a “recalibration” in Southwest Florida’s apartment market have surfaced with the sale of West End at City Walk, a 318-unit complex off McGregor Boulevard in Fort Myers.
The property just changed hands — this time for at least $9.7 million less than it did four years ago — to a Naples-based private equity company.
TerraCap Management paid $71.5 million Oct. 29, public records show, for the apartments at 2250 McGregor Blvd., a few blocks from downtown Fort Myers. The complex previously sold for $81.2 million in December 2021.
Although that appears to be an 11% drop in value on paper, original developer Joe Bonora of Catalyst Asset Management retained an undisclosed equity stake, which would make the actual decline in value higher.
Walker & Dunlop’s brokerage team of Brian Moulder, Chris Chadbourne and Dhaval Patel represented Apex One in the transaction, a news release states.
TerraCap also paid $1 million for a 1.3-acre vacant parcel at McGregor Boulevard and Altamonte Avenue and about $500,000 for a 0.45-acre parcel off McGregor and Virginia Avenue, property records show. Bonora had planned to build more units there, but TerraCap instead will explore constructing luxury townhomes on the sites, said Steve Hagenbuckle, managing partner at TerraCap.
“We’ll go vertical there and do some type of high-end housing, whether it be townhomes or something along those lines,” he said. “We’re in discussions with potential development partners that we would work with on that.”
The 318-unit West End at City Walk features resort-style amenities, including a pool, fitness center and home theater.
West End at City Walk
The vacant land value fell about 40%, from $2.5 million to roughly $1.5 million.
The deals reflect two trends — peak values reached in 2021-22 and a continued decline due to higher interest rates and higher vacancy rates in 2025.
This environment gave Houston-based Apex One reason to sell, and TerraCap reason to buy, Hagenbuckle said. Apex One could not be reached for comment.
“Peak pricing was four years ago,” Hagenbuckle said. “Part of it sometimes has to do with the seller’s debt structure, if they had floating debt with maturity. And the interest rates are double.
“It can create a loss of equity. That would require a significant paydown. Even if you can afford the higher interest rates, at the price it was paid, it makes it a real challenge. Their debt was only for three years. So, they’re facing a maturity. They would have to renew at double the interest rate.”
Despite higher interest rates, the reduced price made the acquisition feasible, he said.
“It’s very new,” Hagenbuckle said. “It’s four years old. It has the highest level of amenities of any of the properties in the area by far. They’re basically resort-style amenities. They have all kinds of things in there, from golf simulators, very spacious fitness centers, a home theater.
“We feel we have superior amenities to the other ones around there.”
TerraCap owns assets in Florida, Georgia, the Carolinas, Colorado, Texas and Arizona.
“We’re in a lot of the rapid-growing markets that have a lot of in-migration and corporate relocations,” Hagenbuckle said. “That drives a lot of migratory trends.”
Locally, TerraCap’s properties include Versol apartments in Bonita Springs and Estero Oaks off Estero Parkway in south Fort Myers. It also developed Estero Parc, a 198-unit gated community off Terracap Way in Estero.
As for rents at West End at City Walk, those won’t be affected by the ownership change. ZRS will manage the property, and TerraCap plans to invest further, including bolstering security.
West End at City Walk in Fort Myers sold for $71.5 million to TerraCap Management, marking an 11% price drop since its 2021 sale.
West End at City Walk
For those who recently renewed leases or are about to, TerraCap will offer a perk — free tickets to the Live Fest music festival Dec. 13 in Naples. Hagenbuckle founded the festival five years ago. The tickets sell for $150.
“In the near future, we don’t have plans to change the rents,” Hagenbuckle said. “That’s market driven. There is a fair amount of extra supply in the Fort Myers area. It would be very difficult to push rent. That’s all underwritten into our business model and plan.”
Before redevelopment, the West End at City Walk site was a shopping center that was leveled to make way for the apartments. The vacant 7.8-acre site sold for $7 million in February 2018. Phil Fischler of Fischler Property Co. brokered that deal but was not involved in the recent sale.
“The Lee County multifamily market is recalibrating after an extraordinary surge, with rents up more than 30% in 2022 and easing by 7% over the past 12 months,” said a statement from Catalyst Asset Management. “While some short-term softness is expected, the long-term outlook remains strong, underpinned by steady in-migration and sustained population and job growth across Southwest Florida.”
Paige Rausch, who monitors Lee County’s real estate market and is a consultant with Aslan Realty Advisors, said she analyzed the sale using Gemini, Google’s artificial intelligence-driven platform.
“In short, the price decline reflects a necessary recalibration of values in response to lower income-generating potential (due to higher vacancy and slower rent growth) and significantly higher costs of capital and operation,” the report said.