Berkadia arranges sale and financing of Class AA multifamily community near Orlando

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Verso Luxury Apartments
Berkadia arranged the $57.75 million sale and $41.75 million financing of Verso Luxury Apartments, a 250-unit community located in Davenport, Florida.

Berkadia announces it has arranged the $57.75 million sale and $41.75 million financing of Verso Luxury Apartments, a 250-unit community located southwest of Orlando in Davenport, Florida.Managing Directors Matt Wilcox and Brett Moss, along with Associate Tyler Swidler of Berkadia’s Orlando office, arranged the sale on behalf of a JV between The Garrett Companies and Phoenix Capital Holdings. Managing Director Jason Brown and Senior Real Estate Analyst Austin Katai, of Berkadia’s Indianapolis office secured the loan on behalf of a JV between TTI Capital of Reston, Virginia and Viking Companies of Gainesville, Florida.

Berkadia sourced the loan from Asia Capital Real Estate (“ACRE”), who provided a two-year, floating rate non-recourse loan that allowed the borrower to acquire the property at stabilization with more aggressive underwriting and leverage than the agencies could currently offer.

The transaction, which is TTI Capital’s first acquisition in Florida, continues to demonstrate the diverse nature of capital seeking residential investment opportunities throughout the Orlando MSA, given the area’s strengthening market fundamentals which translate into elevated demand for housing.

“Davenport’s burgeoning local logistics presence and emerging medical critical mass have proven to drive resiliency throughout Davenport / ChampionsGate, especially relative to some of Central Florida’s harder hit industries since the onset of the COVID-19 pandemic. Additionally, Verso’s highly differentiated ‘big house’ product drove one of the most impressive lease-up stories of any community in Central Florida since the onset of the pandemic,” said Moss.

“With the rapid rise in construction costs, mainly driven by lumber, coupled with rising insurance costs, numerous planned developments in the area have been precluded from being successfully capitalized. Sellers of existing multihousing communities are enjoying an onslaught of buyer demand from all corners of the globe, which we do not see subsiding any time soon. As a result, we expect pricing to continue to elevate and cap rates to continue to compress,” added Wilcox.

“The ACRE bridge loan was underwritten and accepted while the property was still completing its initial lease up and stabilization, allowing our client to acquire this luxury property within a tight sale timeframe and with subordinate capital in the capital stack,” said Brown.

Built in 2020, Verso Luxury Apartments is located at 6100 Echelon Way. One-, two- and three-bedroom units include quartz countertops, stainless steel appliances, tile backsplash, wood-style plank flooring, breakfast nooks, NEST thermostats and washer/dryers. Community amenities feature an expansive clubhouse, resort-style swimming pool with private cabanas, fitness center, outdoor kitchen with grill area, parcel lockers, spa and a pet park.

Adjacent to the 96,750-square-foot Ovation Town Center, the community is found near several important day-to-day retail options as well as Fortune 500 employers. Distribution centers from UPS, Amazon, Walmart and CVS are only about 15 minutes away from the property, supplying thousands of steady jobs in the area that buttress Polk County’s employment composition.