Chicago firm jumps into hot multifamily market with $112 million purchase of two apartment properties

TAMPA — A Chicago-based real estate firm has bought two Tampa Bay area apartment complexes for $112 million.

The company, 29th Street Capital, purchased Henley Tampa Palms, a 315-unit complex in Tampa, and Enclave at Northwood, a 188-unit complex in Clearwater.

The new properties increase 29th Street’s existing footprint in the region to more than 1,200 units. The company already owns 707 units at six communities locally. It also owns two others in Jacksonville. In all, 29th Street’s national portfolio is made up of more than 17,000 existing units with another 3,500 in the construction pipeline.

The deal was put together with $91 million in financing that was arranged by the commercial real estate financing firm Berkadia and originated by PGIM Real Estate. The loan includes $85.4 million up front with another $6.1 for future improvements to the properties.

These sales are the latest in what's become a hot market for multifamily buildings, with “over $1 billion of multifamily assets in the metro traded in the first half of 2021, with an average cap rate of 4.5 percent,” according to Berkadia’s Mid-year Multifamily Report. The report finds that rents for the second quarter of the year were up 12.7% to 1,415 and occupancy stood at 96.9%.

“While the pandemic curbed apartment demand nationwide due to public health lockdowns, the greater Tampa-St. Petersburg bucked the U.S. trend, and leasing activity in the second quarter was nearly double the new supply,” Berkadia’s managing director Brad Williamson says in a statement announcing the purchase and the financing.