Hampton Beebe (CANDACE WEST)
Dealmaker: Hampton Beebe
The Deal: The ARA principal helped broker the sale of San Marco at Broken Sound, a 336-unit luxury villa and townhouse community for $80.3 million or about $239,000 per unit, in Boca Raton.
Details: Offers poured in for the plush rental community with a lake, tennis courts, jogging trail, golf course access, attached garages, two pools, recreation center and a slew of upscale amenities.
More than 200 would-be buyers signed confidentiality agreements, brokers held 55 property tours, and the seller had 28 firm offers.
But as the sale gained momentum, attracting institutional investors, private groups and developers looking to convert the rentals to condos, Beebe and a group of ARA executives representing seller Capri Capital Partners LLC slowed the pace to handle due diligence.
“When you have this many buyers looking at something, it’s harder than you think. It’s a matter of going through the process, going through each group’s plan and underwriting each expense and rent forecast to determine who’s the right buyer for the project,” Beebe said. “Otherwise, you run the risk of picking somebody who will either try to come back and extend closing or not close, and then you have to start all over again. It’s important to try to understand each group’s motivation and make recommendations to your client on who to go with as a buyer.”
Beebe worked with Boca Raton-based ARA principal Avery Klann and managing partners Marc deBaptiste and Richard Donnellan to comb through the offers and pinpoint a buyer whose long-term goals, expectations and financing prospects would suit Capri’s Boca Raton asset.
San Marco at Broken Sound is a large residential community with 541,492 square feet of living space on nearly 28 acres at 5501 N. Military Trail. Built in 1992, it has been institutionally owned by the same company for over 20 years. During two decades, it maintained stable, long-term occupancy and rental rates, and was 96 percent occupied at the time of sale.
The residential complex benefits from its location in affluent Boca Raton on the western edge of a sprawling office complex with 7 million square feet of Class A space and within five miles of I-95 and Florida’s Turnpike.
When it last traded in December 1993, San Marco at Broken Sound sold for $36 million. So when the property came on the market again, buyers were motivated. ARA advisers found most prospects willing to invest $12,000 to $15,000 per unit for renovations in exchange for projected rent increases of $225 to $250 per unit.
But one prospect, who also was considering a large-scale rehabilitation, had a more long-term outlook with less aggressive expectations.
Miami-based San Marco Holdings LLC, part of a Delaware limited liability company, had a 15-year loan—an unusually long term for a core-plus property and a sign to ARA that this prospect planned to hold onto the property.
“That made them attractive, because with a long-term hold the assumption is they’re not as aggressive,” Beebe said.
Capri Capital agreed, and when the deal closed June 3 after about a five-month sales process, San Marco Holdings LLC agreed to pay $80.3 million, or a $44.3 million more than the previous sales price.
ARA Finance, a joint venture between ARA and Walker & Dunlop Inc., facilitated financing for the buyer through New York Life Insurance Co. ARA Finance broker Paul Ahmed handled financing.
Quote: “The most interesting thing is the size of this transaction and the number of groups that looked at it,” Beebe said.
Background: Beebe specializes in new business generation and arranges debt sourcing through ARA Finance. He also markets multifamily properties in South Florida. Since joining ARA in 2006, Beebe has been involved in the sale of over $2.5 billion in multifamily assets.