Passco Companies, a privately-held California based real estate company that specializes in the investment, acquisition, development and management of commercial properties throughout the U.S., has acquired Ocean Walk Apartments, a 297-unit multifamily community in the Monroe County of Key West, Florida for $101.5 million, the largest single-asset transaction in the firm’s history.
This is an extremely rare find as this property is one of only three professionally-managed multifamily communities in Key West, representing nearly half of the multifamily supply on the entire island, according to Passco’s Vice President of Acquisitions for the Southeast, Colin Gillis.
“Key West is without a doubt one of the highest barriers to entry markets in the entire country with relatively no remaining development sites, extremely limited competition and a highly-mandated growth ordinance,” adds Gillis.
Gillis explains that there are only two other competing apartment communities on the island, both of which have demonstrated consistently above-average occupancy rates and explosive year-over-year rent growth.
Located on the Atlantic side of the island, Ocean Walk is located in close proximity to the beach, a diverse variety of restaurants, retail, entertainment hubs in downtown and the Key West International Airport. The property features a variety of amenities, including a clubhouse, swimming pool with an expansive sundeck, tennis courts, and basketball court, among others.
“This is an asset that will continue to perform over time and one that we plan to hold long-term,” explains Gillis. “Our strategic approach is to continue a series of capital improvements to upgrade the property, further positioning it for long-term growth.”
During prior ownership, the seller extensively upgraded the majority of the unit interiors with granite countertops, stainless steel appliances, and new cabinetry and flooring, in addition to completing considerable exterior improvements. Passco plans to renovate and update the remaining 10% of the 297 units that were not updated during prior ownership.
Gillis notes that Passco has been extremely active in the Florida market, acquiring more than eight properties in Florida in the last two years.
In addition, Passco has also remained extremely active in multiple markets across the U.S. and currently has acquired four additional properties thus far in 2017, totaling more than $350 million, with several more that are planned to close over the next few months.
“Ocean Walk, along with the additional assets in our acquisition pipeline, is putting us on track to reach our $1 billion goal in commercial real estate assets this year,” says Gillis. “We recently surpassed $2 billion in assets under management, and we plan to continue this momentum, growing our portfolio with high-quality, well-located assets across the country.”
Hampton Beebe, Executive Managing Director at ARA Newmark, the broker involved in the deal adds, “Ocean Walk is truly a one-of-a-kind asset that will continue to benefit from the market’s demand drivers. The Key West market has experienced strong population gains, record rent growth, and is greatly under supplied. This, coupled with the recent renovations completed at the property, provides exceptional value potential for Passco.”
The apartment community is located at 3900 South Roosevelt Boulevard in Key West, Florida. Hampton Beebe with ARA Newmark represented the seller, a partnership between Mast Capital and Rockpoint Group, and the buyer, Passco Companies. Chris Black and Caleb Marten of KeyBank Real Estate Capital’s Commercial Mortgage Group arranged acquisition financing for Passco Companies through Fannie Mae.
About Passco Companies, LLC
Passco Companies, LLC is a nationally recognized market leader in the acquisition, development, and management of multi-family and commercial properties throughout the U.S.
For more than 18 years, Passco has delivered sound investment strategies to clients and partners, enabling them to create, maintain, and add value to their portfolios through a full set of real estate services, asset management, and brokerage, as well as property development, construction, and management services.
Headquartered in Irvine, California, Passco holds a diverse cross section of prime retail, multi-family, office and industrial properties nationwide, and has acquired, managed, and/or developed over $3 billion in property since its inception. The company is currently involved with over 50 properties in 17 states, and is actively growing its investment portfolio in primary and secondary markets throughout the nation. More information is available at www.passco.com
About ARA, A Newmark Company
ARA, A Newmark Company (ARA Newmark) is the leading investment advisory firm in the multihousing industry. From marketing the sale of single assets and portfolios to sourcing acquisition and development equity and financing, ARA Newmark provides 360-degree solutions for clients. In addition to market-rate and mixed-use properties, we offer specialized services in land, student, seniors, manufactured and affordable housing.
With the industry’s deepest bench of multihousing advisors, ARA Newmark provides the insight and experience to ensure world-class execution. Our advisors average 20 years’ experience and are the most skillful negotiators in the industry. They are experts in 300+ markets and provide asset-specific customization that yields highly effective transaction strategies. By leveraging our proprietary database that identifies 200 percent more investor interest, each advisor has ready access to unique market intelligence to drive demand.
Backed by the global resources of Newmark Knight Frank, ARA Newmark matches each client’s assets to a robust group of investors – from private and institutional owners to global entities – and accesses nearly every commercial real estate class for options to diversify and profit.
The firm’s combination of asset sales, debt and equity services and specialty practice groups yields more than $19 billion in transaction volume annually. For more on ARA Newmark’s multihousing-exclusive services, visit www.aranewmark.com.
About Newmark Knight Frank
Newmark Knight Frank (NKF) is one of the world’s leading commercial real estate advisory firms. Together with London-based partner Knight Frank and independently-owned offices, NKF’s 14,100 professionals operate from more than 400 offices in established and emerging property markets on six continents.
With roots dating back to 1929, NKF’s strong foundation makes it one of the most trusted names in commercial real estate. NKF’s full-service platform comprises BGC’s real estate services segment, offering commercial real estate tenants, landlords, investors and developers a wide range of services including leasing; capital markets services, including investment sales, debt placement, appraisal, and valuation services; commercial mortgage brokerage services; as well as corporate advisory services, consulting, project and development management, and property and corporate facilities management services. For further information, visit www.ngkf.com.
NKF is a part of BGC Partners, Inc., a leading global brokerage company servicing the financial and real estate markets. BGC’s common stock trades on the NASDAQ Global Select Market under the ticker symbol (NASDAQ: BGCP). BGC also has an outstanding bond issuance of Senior Notes due June 15, 2042, which trade on the New York Stock Exchange under the symbol (NYSE: BGCA). BGC Partners is led by Chairman and Chief Executive Officer Howard W. Lutnick. For more information, please visit www.bgcpartners.com.