At first glance, another Southwest Florida apartment sales record didn’t just fall. It was shattered.
Diamond Oaks Village, a 160-unit complex at 24110 Tamiami Trail S. in Bonita Springs near Coconut Point, sold March 17 for $70.75 million. With an average of $442,187.50 per unit, it shattered the record of $335,714 per unit set just 10 days prior with the sale of Estero Oaks.
That record didn’t last long, either. It eclipsed the $332,164 per-unit record paid Feb. 4 for Drift at the Forum in Fort Myers.
Diamond Oaks Village is a 55-and-over community. It’s a different product than the Forum and Estero complexes.
“The whole concept with properties like this, is there are other ways they create revenue besides just the rent,” said Matt Simmons, a property appraiser with Maxwell, Hendry & Simmons. “Or, they have rents that include those things, but you’re paying for it with additional rent. The income for the property owner is higher than if that same physical facility operated as traditional multifamily. It would generate less income.”
Rents at Diamond Oaks Village start at about $2,240 a month for a one-bedroom, one-bath unit and range to $3,070 for a two-bedroom, two-bath unit.
Rents at Drift at Forum start at $1,710 for a one-bedroom, one-bath unit and $2,510 for a three-bedroom, two-bath unit; rents at Estero Oaks start at $1,925 for a one-bedroom, one-bath unit and go to $2,885 for a three-bedroom, two-bath unit.
Castle Lanterra Properties, a Suffern, New York-based investment company, purchased the three apartment buildings at Diamond Oaks Village under six business entities: Bonita Springs Owner LLC, numbered 1 through 6.
Elie Rieder owns Castle Lanterra Properties and could not be reached for comment. But he released a statement through a public relations firm stating, “We are excited to bring our hands-on approach to ownership to our newest acquisition and look forward to implementing a value-add strategy that further enhances this excellent residential community.”
The new, per-unit price record rose by 31.7%, but again, it’s for a different type of product than a regular apartment complex. But look at how the value of Diamond Oaks Village in and of itself has grown. In January 2020, The Carlyle Group and United Group of Companies picked up a $32.5 million mortgage on the complex, which was then valued at about $46.4 million, according to an article in real estate publication Commercial Observer. Just 26 months later, the value grew by 52% to $70.75 million.
“That’s why this seems so bizarre when you look at the price per unit,” Simmons said. “It’s a bit of a different animal. It’s a little bit of a different asset class.” Still, the day of a traditional apartment complex selling for more than $400,000 per unit does seem close, Simmons said.
“I don’t know how they structured the deal,” Simmons said. “But you could almost argue there is enterprise value. I just put something out on social media saying that within the next six months, we’ll have something get there above $400,000. But this is beyond the traditional multifamily. It’s something other than just straight-up multifamily, which can account for the price.”
