Trion Properties, a private equity real estate firm based in West Hollywood, California and Miami, Florida specializing in multifamily investments, has acquired Patterson Court, a 384-unit luxury multifamily community in Orlando, Florida for $107.75 million.
This is Trion’s first property in Florida and its second within the Southeast after the recent acquisition of Crescent Commons in Fayetteville, NC.
“This was an incredible chance to acquire a luxury apartment community off market, at well below replacement cost, in one of the country’s top three markets for inbound migration,” says Max Sharkansky, Managing Partner at Trion Properties. “Because of the unique nature and history of Patterson Court, which was designed specifically as housing for the Disney College Program and remains on a triple-net master lease to the Walt Disney Company until April 2023, we were able to acquire this asset at a cap rate in the 5% range, which is unheard of in this market.”
Sharkansky notes that when Disney began relocating previous residents to other properties as part of a change in business plan, the units were leased up to full occupancy very quickly at under-market rates, which will foster organic growth as units turn. Trion will implement a heavy renovation program to upgrade the asset and further reposition it to accommodate more traditional multifamily residents.
“This submarket saw rent growth of more than 20 percent in the past year alone,” continues Sharkansky. “With the continued population boom in Orlando, and Disney recently announcing it will be relocating 2,000 jobs from California, we anticipate a continued upward trajectory. Much of the multifamily demand comes from families with children, as rental living remains an attractive alternative to the high costs of home ownership in adjacent neighborhoods, which this property accommodates well. Further, Patterson Court is within short walking distance from a new STEM-oriented elementary school that is positioned to be one of the best in the area.”
According to Sharkansky, the community’s spacious floorplans and unit composition, featuring 50 percent three-bed, three-bath apartment homes, meet an incredibly strong demand in the submarket.
Marley Dominguez, Director of Acquisitions at Trion, adds: “Due to the triple-net master lease to Disney, Trion will not be responsible for any expenses, including property management, for the next 18 months. We will utilize some of the cashflow over that period to support upgrades to the asset that will make it highly competitive in the market.”
According to Dominguez, Patterson Court was built to very high specs and the sprawling, low-density community with resort-style amenities and rare unit features, including walk-in closets and bathrooms in each bedroom, is effectively irreplaceable.
“Because the property was used for short-term program housing and not occupied like typical multifamily, it is in outstanding condition for its 2008 vintage,” says Dominguez. “That said, we will be able to bring the property to 2021 quality through strategic renovations and upgrades of units and common areas.”
Mitch Paskover, Managing Partner at Trion Properties, explains that Trion was able to secure Patterson Court before the asset went to market based on close broker relationships, as well as strong capitalization and a trusted track record.
“We’ve been aggressively pursuing lucrative opportunities in Florida and keeping in consistent contact with our connections in the market,” Paskover says. “Due to our trusted reputation and ability to offer certainty of closing, we were able to secure the community for a well-below-market price.”
Paskover adds that Trion raised equity for the acquisition from individual investors in the property and through the Trion Multifamily Opportunity Fund III.
Berkadia Orlando’s Managing Director Brett Moss, Managing Director Matt Wilcox, and Associate Director Tyler Swidler, along with Berkadia Miami’s Senior Managing Director Jaret Turkell, represented the seller in the transaction.
“Patterson Court represented one of the most unique and story-laden value-add multifamily investment opportunities in Central Florida in recent history,” says Moss. “The market’s response to this opportunity was exceptional, and the sale of Patterson Court is emblematic of the strength of the Orlando apartment market and ever-growing investor appeal.”
Berkadia Miami’s Managing Director Scott Wadler and Managing Director Brad Williamson, along with Berkadia Orlando’s Associate Director Wesley Moczul, secured the acquisition financing on behalf of Trion.
As part of the acquisition’s capitalization, Trion raised $20 million of equity for Patterson Court from retail investors on CrowdStreet, the largest online real estate investing platform, with 308 individual investors participating in the offering.
Jesse Maas, Managing Director of CrowdStreet, attributes the offering’s success to the underlying deal fundamentals and some special attributes unique to this property: “The Orlando market is #8 for multifamily acquisitions on CrowdStreet’s ranking of the ‘Best Places to Invest in 2021,’ so it’s a location and product type for which there is generally strong demand. At the same time, this project is unique in that the apartments are currently fully leased to a single tenant, Walt Disney World Resort, so the risk profile and upside is particularly attractive. Investors on our marketplace seemed to really appreciate the opportunity and investment thesis that Trion Properties presented with Patterson Court.”
Patterson Court is directly across the highway from the entrance to the Walt Disney World Resort and in the heart of Orlando’s premier dining and entertainment district, the International Drive (I-Drive) corridor. The property provides residents easy access to world class restaurants and shopping, as well as numerous business parks and Downtown Orlando. Ten of Orlando’s 12 largest employers located in close proximity.
The property consists of 17 three-story wood framed buildings, and one, two-, and three-bedroom units. Community amenities include a lavish sundeck with cabanas and lounges, swimming pool, fitness center, student rooms with individual work centers, a car wash center, and four on-site laundry facilities.
Patterson Court is located at 8151 Patterson Woods Drive in Orlando, Florida.