Citrus Grove Apartments sells for $2.4 million

BUYER: Citrus Grove Affordable LLC, Coral Gables

SELLER: Bethel Community Heights Inc.

PROPERTY: 701 and 731 15th S., St. Petersburg

PRICE: $2.4 million

LAW FIRM ON DEED: The Coleman Law Group PA, St. Petersburg

PLANS, DESCRIPTION: A private investor in Miami purchased the 84-unit Citrus Grove Apartments for $2.4 million.

The price equated to $28,571 per unit.

The U.S. Department of Housing and Urban Development (HUD)-subsidized apartment development was built in 1971. The Section 8, affordable-housing complex features seven three-story, concrete block apartment buildings on a 3.16-acre site.

Casey Babb and Luis Baez, of Marcus & Millichap's Tampa office, handled the transaction.

The buyer has partnered with an operator of affordable housing properties, according to Babb. High on the new buyer's agenda for the property is improving the living conditions and reducing crime on the property.

“HUD uses the REAC [Real Estate Assessment Center] score to measure its properties,” Babb says. “Once your score falls below 70%, HUD starts to lean on you [to improve the property]. This property went from a REAC score of 96% to the 20s. If you did concentric circles looking at crime rates, it gets worse and worse until you get to this property. The central air conditioners were stolen. It had monumental problems with leaks and mold. HUD stepped in and told the owner they needed to either sell the property or they were going to pull the subsidy.”

The sale took 2.5 years, but during that time, the seller brought hired a management company to start some of the repairs on the property.

The buyer plans to install a new HVAC system, replace a number of roofs, add security cameras and build an iron perimeter fence. The initial work has been budgeted at roughly $500,000.

The buyer's entity, Citrus Grove Affordable LLC, mortgaged the property to Bank of America for $1.92 million.