Cottonwood Residential, a Salt Lake City-based multifamily REIT, paid $85 million to expand its Florida portfolio with the recently completed Addison at Clermont.
The 230-unit community is located at the intersection of Hooks Street and Citrus Tower Boulevard and was developed by ContraVest in 2019. It was one of the last multifamily projects to secure permits before the City of Clermont enacted a moratorium that halted construction on new apartments until late 2020.
The sale price breaks down to nearly $370,000 per unit. The acquisition marks Cottonwood’s sixth Florida asset and first in Central Florida. The REIT also has acquired properties in Tampa, St. Petersburg, Pompano Beach and West Palm Beach.
Floorplans at the Clermont site range from 730 to 1,449 square feet and include amenities such as a resort-style pool with cabanas, poolside grill, and fireplace, as well as several fitness studios with Fitness on Demand and a bark park with grooming station. The community features a mix of garden-style apartments and carriage house units with updated finishes, such as ceramic top stoves, custom pantries, rainfall and showerheads and ceramic tile flooring in all bathrooms.
ContraVest President Steven Ogier had utilized HUD-secured financing from Greystone Servicing to develop the project, and Cottonwood assumed the outstanding mortgage debt of $35.5 million.
“When you go with the HUD financing, there’s usually a lot more hurdles before you get to the finish line,” Ogier said prior to construction. “You get a little bit higher loan-to-cost ratio, and it’s a declining interest rate.”
Ogier said Jamie May from JBM Institutional Multifamily Advisors marketed the property to buyers that would agree to the debt assumption. As the Federal Reserve raised interest rates this year, the deal grew even more attractive to buyers. “We were under contract a good four or five months ago, but we had to wait for HUD to approve the assumption,” he said.
The sale occurs at a time when two new Class A apartment communities on Hooks Street are seeking permits. Those include Clermont Hills, a proposed 312-unit community from Skorman Construction at the southeast corner of Hooks and Excalibur Road, practically across from the Addison property. Just down the road, AC Commercial and Woodfield Development have applied for a PD amendment that would allow them to build The Vue at Clermont with 289 units on roughly 24 acres north of Hooks Street. Both projects received approval from the city’s Planning & Zoning Commission earlier this month.
The transaction marks the second ContraVest divestiture in Orlando this year. A deal involving the 266-unit Addison at Lake Bryan, which opened in 2021 near Disney theme parks, closed on June 17. The buyer, New York-based real estate investment company American Realty Advisors, paid $101 million — or $380,939 per unit —for the mid-rise apartment community at 12570 Splendid Place. The firm also sold its Addison Skyway Marina in St. Petersburg this year.
“The good news is absorption is strong. We’re leasing properties as fast as we can build them,” Ogier said. “Even with the high interest rates, I do believe we’re going to see high demand in Florida, and especially Orlando, for a long time.”
ContraVest is an active developer in Central Florida. The 323-unit Addison Gateway, located at 7200 N. Frontage Rd., just north of the Orlando International Airport, began leasing this year.
The 277-unit Addison Longwood in Seminole County is expected to open by the winter, according to its website.