DAYTONA BEACH — Just over a year after welcoming its first residents, the Tomoka Pointe Apartments behind Tomoka Town Center shopping center has sold for $57.1 million.
It’s the most ever paid for an apartment complex in Volusia County and comes on the heels of record-setting sales of two mobile home parks in the Daytona Beach area.
The buyer of the 276-unit Tomoka Pointe Apartments is an investor group that has offices in South Florida and Atlanta, Georgia, said Ryan Moody, one of the commercial Realtors with Newmark Knight Frank that was involved in negotiating the real estate transaction. Moody is a senior managing director with the national real estate brokerage.
He did not identify the buyer.
Residents at Tomoka Pointe recently received notices informing them of the change in ownership. The new owner is identified as an entity called “WP TomokaPT MF-FL Owner LLC.”
State incorporation records show the address for WP TomokaPT as being in Plantation. The address is also shared by two other companies, CT Corporation Systems, and a newly formed entity called Paragon Healthcare Limited Partnership. CT is a subsidiary of Wolters Kluwer, a multi-national information systems company based in the Netherlands with offices in countries throughout the world.
The sale of Tomoka Pointe at 1317 Tomoka Town Center Drive closed on Nov. 23, Moody said. The luxury apartment complex is along the west side of Tomoka Town Center, just north of Mason Avenue.
The seller was a partnership of Palm Beach Gardens-based Eastwind Development and West Palm Beach-based North American Development Group. North American is the developer of Tomoka Town Center.
The developers of Tomoka Pointe Apartments just completed the 240-unit Madison Pointe Apartments next door on Nov. 19. Madison Pointe is directly north of Tomoka Pointe at 1310 Tomoka Town Center Drive.
The sale price for Tomoka Pointe is a new record, both in total amount as well as how much it fetched per unit: $207,884.
The previous record for total amount was believed to be the $46.2 million sale in 2018 of the Sands Parc Apartments just under a mile to the north along the east side of Williamson. Sands Parc was the LPGA area’s first new luxury apartment complex when it was completed in 2017.
“(More than) $206,000 a door, that’s a really good number,” said Ty Lohman, an Ormond Beach investor who was not involved in the Tomoka Pointe sale but has bought and sold a number of apartment properties both in the Daytona Beach area as well as in Jacksonville and Orlando in recent years.
“I can’t think of a bigger sale for a single apartment property (in Volusia County),” said Lohman. “With interest rates so low right now, the demand (among national investors for apartment properties) is there.”
Appeal of luxury apartments increasing
Luxury apartment properties, also known as “Class A multifamily,” are appealing to investors as a safe, steady source of revenue, according to a recent article in Forbes magazine. That appeal has increased with the onset of the COVID-19 coronavirus pandemic.
“Multifamily has historically been a very good investment during a recession. Now, with the pandemic creating volatility in office, retail, industrial and other sectors, the capital usually directed toward those investments will most likely seek the stability and predictability of multifamily,” according to the Forbes article. “Why is multifamily the strongest asset class during the pandemic? It’s pretty simple: Everyone needs a place to live.”
Ryan Moody of Newmark said the occupancy rate for Tomoka Pointe Apartments is in the low to mid-90% range.
Luxury apartments also hold strong appeal to investors because they tend to be located in fast-growing communities with the demographics to support them.
The LPGA corridor has been the fastest-growing area in Volusia County in recent years. New developments include the side-by-side Tanger Outlets and Tomoka Town Center shopping centers, the Jimmy Buffet-themed Latitude Margaritaville 55-and-older community and all-ages Mosaic “full life” community on the west side of I-95, the new Publix-anchored Latitude Landings shopping center in front of Margaritaville, and distribution facilities for both Trader Joe’s and Amazon.
The area also saw the $96 million sale in July of the 533-home site Aberdeen 55-and-older manufactured home community along the west side of Clyde Morris Boulevard, which set a record for the most money paid for a mobile home park in Volusia County. That record is set to be eclipsed this month when The Falls at Ormond 55-and-older mobile home park just up the street from Aberdeen is set to close. The sale price for The Falls has not yet been disclosed, but is believed to be more than $120 million, according to Frank Valenti, president of the community’s homeowners association.
The buyers of both Aberdeen as well as The Falls are national investor groups.
The area’s growth has spurred a surge in new luxury apartment projects in the area, including the new 500 East Apartments on LPGA Boulevard, just east of Clyde Morris Boulevard and the new Napier Apartments on the east side of Williamson, across from the AdventHealth Daytona Beach hospital.
The website apartments.com lists rental rates for apartment units at Tomoka Pointe ranging from $1,216 to $1,800 a month.
“With that kind of return, investors can afford to spend that kind of money,” said Buddy Budiansky, a commercial Realtor with Realty Pros Commercial, who was not involved in the Tomoka Pointe sale.
Carl Lentz IV, the managing partner at SVN Alliance Commercial Real Estate Advisors in Ormond Beach, said he is not surprised that Tomoka Pointe sold for such a high amount.
“The growing demand for multifamily has created the necessary stability to entice investors to place their money in multifamily investments in the growing Daytona Beach market,” he said.
Demand for luxury apartments in the Daytona Beach area has increased since the pandemic began because it is causing more people to relocate here from other parts of the country.
“A lot of people would rather rent a luxury apartment and enjoy the amenities they offer rather than buy a home and the headaches that come with homeownership,” he said. “I see that trend continuing for another three to five years at least.”
Article reprinted from The Daytona Beach News-Journal