In 2022, Excelsa Properties exited the state of Florida by selling its Archer Road portfolio in Gainesville at one of the best times possible after completing significant upgrades to amenities and some unit interiors
“Having proven the potential of these assets, the sale benefited from a very strong Florida multifamily market, in particular for solid value-add properties in prime locations,” Jonathan Woods, chief operating officer at Excelsa Properties told Multifamily Dive.
As buyers were clamoring to enter the Sunshine State, the Bethesda, Maryland-based apartment investor sold its Florida holdings, generating an internal rate of more than 40%, according to information the company shared with Multifamily Dive.
However, the firm still liked Florida, as property prices were dropping. “Since then, we have been targeting and underwriting deals in the Tampa area as well as Jacksonville, Orlando, the Space Coast and the Panhandle,” David Fletcher, managing director at Excelsa Properties, told Multifamily Dive.
Now, Excelsa Properties is returning to Florida with the acquisition of The Drake at St. Pete, a 36-building, 477-unit property in St. Petersburg, last month. The two-story asset sits on 12.6 acres and has one-, two- and three-bedroom units.
“The Drake at St. Pete immediately attracted us because it has excellent access to downtown St. Pete and the beach as well as Tampa, Bradenton and Clearwater,” Fletcher said. “The location is well suited to benefit from economic growth in the Tampa MSA. Additionally, there are no direct competitors nearby and there is no supply delivering into the nearby area.”
Excelsa Properties plans to spend $8 million in improvements. “The interiors of The Drake at St. Pete are very attractive,” Fletcher said. “We will upgrade the appliances in about 40% of the units, overhaul the landscaping and add amenities.”
More investments coming
Although there are signs the apartment sales market is picking up, Fletcher said Excelsa Properties doesn't yet see strong competition when it bids for older properties because bidders don’t have discretionary capital.
“Of the more than 800 assets we underwrote during the last 12 months, this is one of the very few we bid on,” Fletcher said.
Excelsa Properties, which has acquired 19 properties since its founding in 2009 and currently has $300 million under management, will continue looking at acquisition opportunities. But Fletcher said the firm, which has never used high-leverage debt, will remain prudent.
“We will pursue deals cautiously, carefully and rigorously but not aggressively,” Fletcher said.
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