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Case Study: Audubon Place |
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Orlando, FL |
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History in the Market – Milton Fine and Interstate Hotels Corporation developed, owned and operated numerous hotels throughout Florida to include the prestigious Sawgrass Resort in Ponte Vedra Beach. With over twenty years of experience and long-standing business relationships throughout the state, as well as FFC Capital's success in the multi-family property sector, a subsidiary of FFC Capital acquired an 85% interest in Colonial Gardens Apartments in Orlando, Florida in August 2004 for $13.2 million with $3.6 million of equity. |
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Opportunities |
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Colonial Gardens Apartments consisted of fifteen two-story apartment structures and two single-story office/clubhouse structures with a total of 181 rental units on 8.99 acres of land adjacent to Druid Lake. The property is located six miles from downtown Orlando and situated between downtown Winter Park and Orlando’s Central Business District. The immediate surrounding residential neighborhoods include Audubon Park and Colonialtown with average home prices of $250,000. |
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The apartment complex had been well maintained and was in good physical condition with an average occupancy of 96%. Average unit size ranged from 706 to 1,015 square feet depending on 1BR/1BA, 2BR/1BA or 2BR/2BA apartment configurations. Property amenities included a clubhouse, leasing center, private patios or balconies, two outdoor swimming pools, beautifully landscaped courtyards and lakefront views. |
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Based on knowledge of the market, FFC Capital’s strategy was to acquire Colonial Gardens Apartments and pursue immediate condo conversion. The Orlando market had been strong over the years with average downtown home sales climbing nearly 81% in the last seven years with the shifting in living preferences as more urban professionals relocate closer to downtown due to increasing traffic. Market data also supported rising trends for the next few years making the condo conversion opportunity ideal given a shortage of garden style condominiums in the surrounding area and no new development planned for the near future. |
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Performance |
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Since acquisition in August 2004, extensive exterior and interior renovations were completed to convert the apartments to condominium units including unit configuration changes as well as new kitchens, bathrooms, carports and the addition of a fitness center. With a June 2005 sell out, FFC Capital earned $3.5 million in profit resulting in an internal rate of return of 66%. |
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