The Milestone Group bought a 206-unit apartment complex near Boynton Beach for $46.4 million, marking an uptick in South Florida multifamily investment sales.
Dallas-based Milestone bought the Casa Brera at Toscana Isles at 4725 Via Bari in unincorporated Palm Beach County from Ramsey, New Jersey-based Raia Capital Management, according to records and real estate database Vizzda. The deal breaks down to $225,000 per unit.
Hampton Beebe and Avery Klann of Newmark represented the seller.
The buyer assumed the seller’s $27.4 million Fannie Mae loan on the property and took out an additional $7.7 million Fannie Mae loan, Vizzda records show. Wells Fargo originated both loans.
Generally, buyers take over sellers’ existing loans on properties because the debt has better terms than what the buyer can secure for new financing. The loan Milestone assumed from Raia Capital has an interest rate of 3.93 percent. The current rate is over 5 percent.
Agency loans also tend to have better terms than bank financing, experts have said.
The purchase price is a roughly 20 percent discount from replacement cost in the “supply-constrained” submarket, David Giles, vice president of acquisitions at Milestone, said in the firm’s news release about the deal.
Completed in 2013, Casa Brera comprises seven, three-story apartment buildings and a pair of one-story clubhouse buildings on a 12.2-acre site, per Vizzda. Raia Capital paid $44.4 million for the complex in 2018, records show.
Casa Brera offers one-bedroom to three-bedroom units, with monthly rents ranging from $1,456 to $2,610, according to its website.
Raia Capital is an investment manager and developer with a portfolio of 3,000 apartments in Florida, Tennessee, Alabama, South Carolina and Missouri, its website shows. Founded by members of the Raia family, it’s led by Samuel A. and Lawrence C. Raia.
Led by Jeffrey L. Goldberg and Robert P. Landin, Milestone is a multifamily investor that’s made more than $9 billion in investments since it was founded in 2003, according to its website. Its portfolio consists of more than 80,000 units.
Milestone has been ramping up its South Florida deals in recent years. In 2021, it paid $107 million for the 505-unit Emerald Palms apartment complex at 12325 Southwest 151st Street in unincorporated Miami-Dade County, near Zoo Miami. Last year, Milestone bought the 488-unit Axis Delray Beach apartment complex at 1495 Spring Harbor Drive in Delray Beach for $111.6 million.
Records show Milestone still owns both complexes.
Some South Florida multifamily investment sales have closed in recent months, despite elevated interest rates, slower demand and lease-ups, and flat –– and even declining –– rent growth. Buyers still closing on apartments largely are avoiding higher rates by using all cash or relying on loans from agencies and insurance firms. Some are assuming sellers’ existing debt and others are finding other workarounds.
This month, Favo Capital bought the 22-story, 277-unit 1818 Park tower at 1818 Hollywood Boulevard in Hollywood for $190 million through a deal of all stock and an assumption of liabilities.
Also in August, Property Reserve –– which invests The Church of Jesus Christ of Latter-day Saints’ reserve funds into commercial real estate –– paid $152.5 million for the 384-unit Del Ola apartment complex at 7801 North Federal Highway in Boca Raton. Property Reserve recorded no loan for the deal.
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