Argosy Invests in the Clearwater Properties
Argosy Real Estate Partners III, L.P. and its parallel Funds (“AREP III”) recently made controlling investments in two multifamily properties in the Clearwater submarket of Tampa, Florida (the “Clearwater Properties”). The Clearwater Properties consist of Cameron Lakes, a 207 unit, garden-style apartment community which was acquired on February 12, 2015 and Coachman Crossing, a 218 unit, garden-style apartment community acquired on March 17, 2015. The two properties are located less than one mile apart. The properties were acquired in separate off market transactions at favorable cost bases below comparable trades in the market.
The properties currently average 95% occupancy with stable historical operating performance. Both properties feature spacious floor plans as well as a unit mix and amenity package appropriate to the market, but suffer from a lack of capital investment over the past several years. The business plan is to rebrand and complete moderate capital improvements on both properties to address interior and exterior deficiencies that have caused the properties to underperform their competitive set. The renovations, coupled with new property management at Cameron Lakes and economies of scale from joint management of the two properties, will support top-line rent growth and improved operating performance.
Clearwater is a preferred submarket within the Tampa Bay MSA, offering a suburban environment with strong retail and recreational amenities, and good access to employment centers in CBD Tampa to the east and St. Petersburg to the south. Clearwater is nearly completely built out and features high barriers to entry relative to other Tampa submarkets, limiting new supply.
The Clearwater Properties have been acquired in partnership with Goff Capital Partners, a real estate-focused private equity firm headquartered in Dallas with additional offices in Denver and Stamford. The firm has broad investment and capital markets experience and is led by John C. Goff, the founder and CEO of Crescent Real Estate Equities. The property manager is Blue Rock Partners, a regional property management company primarily focused on Class B multifamily properties throughout the Southeast, which currently manages 10,000 units. Blue Rock is also a minority partner in the joint venture.