Cypress Legends sets new benchmark

BUYER: Northland Investment Corp. (Northland Cypress Legends LLC (officers: Lawrence Gottesdiener, Steven Rosenthal, Suzanne Abair and Beth Kinsley), Newtown, Mass.
SELLER: Cypress Legends LLC
PROPERTY: 3207-3371 Cypress Legends Circle (aka 3247 Forum Blvd.), Fort Myers
PRICE: $46 million
PREVIOUS PRICE: $2.5 million, April 2004

The Fort Myers apartment market may be hot, but Northland Investment Corp.'s purchase of Cypress Legends marks a new sales high. The Newton, Mass.-based real estate investment company purchased the 332-unit Cypress Legends for $46 million.

The price equated to $138,554 per unit.

That sale price is the largest amount paid for an apartment complex in Lee County since the condo conversion craze in 2006 (excluding debit or interrelated company sales). That price is also the fifth largest for an apartment with more than 10 units going to back to at least 2000, according to records with the Lee County Property Appraiser's office. Those earlier sales include $79.56 million paid for Palms of Monterrey in March 2006, $64 million for Reflection Lakes in February 2006, $54.3 million for Monterra at Bonita Springs in September 2005 and $48.5 million for Bay Harbor in February 2006.

Northland Investment currently owns Reflection Lakes — now called Promenade at Reflection Lakes — Monterra at Bonita Springs and Bay Harbor.

The Cypress Legends sale also bests the previous post-recession record of $45.7 million paid by a joint venture of Northland Investment and Redwood Investments LLC for the 428-unit Ashlar Apartment Homes in April 2012.

The 19-building Cypress Legends was built in 2006. Units range in size from one to three bedrooms and average nearly 1,100 square feet. Community amenities include gated access, a fitness center, swimming pool, outdoor kitchen, playground, sand volleyball court, beach area and dog park.

“[The Fort Myers apartment market] is on fire,” says Jonathan Richards, who was not directly involved in the sale but lead's CRE Consultants' Florida Multi-Housing Group. “Everything is lining up very much in favor of owners. There is supply coming online, but it's limited. This is one of the tightest markets for occupancy in the Southeast.”

The average occupancy right now in Fort Myers, he says, is 98.4%, which includes A, B and C class properties.

The rest of Lee County is not any better. CoStar Group reports that of the 426 apartment properties and 25,127 units it tracks in Lee County, the current vacancy rate is 2.5%. Further, countywide average asking rents are at their highest level in more than 15 years at $938.89 a month. It reports that 1,228 units are currently under construction. Richard expands that projection to about 3,000 units planned or in some stage of the development pipeline in the Lee County area.

“Even if that's all built, I think we could absorbed it,” Richards says. “It would amount to about a 10% increase in inventory. I don't think that many units would be that big a deal.”

In addition to a healthy multifamily market, Cypress Legends had the benefit of an up-and-coming location.

Also known as Cypress Legends at The Forum, the 342,308-square-foot property benefited significantly from the improving interest and demand for The Forum mixed-use area just east of Intestate 75. Richardson says the property also was built using tunnel-form construction, which means that the shell of the units is made of concrete.

“It's like a mini bomb shelter,” he says. “It's great for protection during a hurricane and for insurance.”

With the purchase, Northland Investment owns and operates 23 properties with 6,626 apartment units in Florida. Seven of those properties are in Fort Myers, including Ashlar, Bay Breeze Villas, Bay Harbor, Iona Lakes, Promenade at Reflection Lakes. Nationally, the company, which has $3.5 billion in assets under management, owns 88 properties in eight states, totaling more than 22,000 apartment units and more than 2 million square feet of commercial space.

Northland Investment had not replied to repeated requests for comments as of deadline.

The purchase entity, Northland Cypress Legends LLC, mortgaged the property to CBRE Capital Markets Inc. for $34.5 million.