June 16, 2015

Atlanta Group Buys Westchase Apartments for $64.5M, Plans Renovations

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By Ashley Gurbal Kritzer, Tampa Bay Business Journal

Pollack Shores Real Estate Group has big plans for Lexington Park at Westchase.
The Atlanta-based investment group paid $64.5 million or $161,250 per unit for the 400-unit Lexington Park in a deal that closed June 4, according to a Hillsborough County deed filed Wednesday.

The seller, Miami Beach-based Crescent Heights, paid $42.5 million or $106,250 per unit in 2010. Lexington Park was built in 2010.

Pollack Shores is planning to invest “significant capital” in the property, managing director Graham Carpenter said Thursday. The group will update the finishes in the units — adding new countertops and stainless steel appliances — and renovate the pool house.

Buying an apartment complex with a strategy of renovating it to raise rents is known in the industry as a “value-add” deal. At a sales price of $161,250 per apartment, Lexington Park is a very expensive property with which to attempt that sort of play. Most value-add deals are sold for well below $130,000 per unit.

But it’s also a unique property: Half of its units are townhouses that can command more rent than a traditional apartment. It’s also in Westchase, a very desirable bedroom community with proximity to shopping and dining as well as major employers in Oldsmar, including Nielsen Media Research, Lockheed Martin and United Healthcare.

With the upgrades, Lexington Park could be a potential candidate for conversion to condominiums, Carpenter said.

“It could make sense as a conversion some day,” he said. “We wouldn’t do it, but we wouldn’t be surprised if a converter wants to buy it from us.”

Read the full article here.