An Avison Young principal in Miami secured a $70.5 million loan for Orlando’s CitiTower high-rise apartment, one of only a handful of downtown multifamily towers.
At 25 stories, the building towers over a market where midrises are more common, said Avison Young’s George Vail, who secured the loan.
The 233-unit building’s design was inspired by the Bauhaus movement, was built to condominium standards and has a high occupancy and top-dollar rents.
“The quality here surpasses anything else in the market. I am not trying to exaggerate. The art, the details, the finishes, the amenities just surpass anything else in the market,” Vail said.
He negotiated the financing on behalf of Naples-based owner-developer Summa Development Group LLC from lender Asia Capital Real Estate, a New York-based real estate investment company for institutional investors and prominent family offices. The deal closed Dec. 19.
Summa Development, which owns the tower through affiliate East SDG CitiTower LLC, used the same company for the three-year, floating-rate loan on the tower completed in August 2017.
Most of the $70.5 million will be used to pay off a $64 million construction loan, and the remaining $6.5 million will be used to prepare the 13,000-square-foot office space on the second floor and some of the ground-floor retail space for tenants.
“This is a brand new building so the [office] space is raw,” Vail said. “They are going to have to put in drop ceilings. They are going to have to add some additional windows, some carpet or tile, finish out the bathrooms, stuff like that. Right now it’s like a concrete box, so you have to make it into an office.”
Some of the 11,000-square-foot retail space has been leased, but Summa Development still needs to find tenants and ready about a quarter of that space, Vail said.
HOT ASSET, HOT MARKET
The Orlando job market is one of the fastest-growing in the U.S., attracting newcomers. That bodes well for the multifamily market. The fourth-quarter vacancy rate of 3 percent already was one of the lowest in the nation, according to a Marcus & Millichap report.
About 2,300 apartments were to be delivered in the fourth quarter, but the supply won’t outpace demand, and rents remain high, according to the report. New construction has focused on the suburbs beyond the Orlando city limits.
Suburban growth has made CitiTower even more desirable, Vail said. Residents have the live-work-play lifestyle increasingly sought by urban dwellers who shun the suburbs.
CitiTower was 97 percent occupied when the loan was secured, with the leasing rate being about 30 units per month, according to Vail.
“Most of the development in Orlando has been kind of suburban three-story buildings. It’s a special building, and it’s catering to very high-income renters in that market. It’s not the typical apartment building that is geared toward people who work in Disney World,” he said. “It’s really for the professional that desires to live in a condominium-quality building in an urban setting. The walkability is very, very good here.”
CitiTower at 101 Lake Ave. is a quick walk to the Dr. Phillips Center for the Performing Arts, a block from a Publix store at the 16-story Paramount on Lake Eola apartment tower and less than a mile by car from the Amway Center, home of the Orlando Magic.
The building was designed with inspiration from German architect Walter Gropius’ Bauhaus movement in art and architecture started in the early 1900s. Works by artist Israel Guevara hangs inside, including 60-foot art panels, and a Jorge Blanco sculpture is in front of the tower. The lobby chandelier design was inspired by glass artist Dale Chihuly.
“It’s really kind of like a Miami condominium in Orlando,” Vail said. “Things that we take for granted in Miami aren’t standard in that market. For example, the architecture, stainless-steel appliances.”
This, along with the location and tight downtown apartment market, has pushed up rents. A 726-square-foot studio was listed for $1,703 per month; a 919-square-foot one-bedroom started at $1,903; a 1,075-square-foot two-bedroom was listed at $2,590; and a 1,432-square-foot three-bedroom was listed at $4,010, according to the CitiTower website.
The studios likely are bigger than the average Miami studio as a way for Summa Development to stay competitive in a market where single-family homes are the norm, Vail said.
Taller downtown apartment buildings are the 32-story 55 West and the 31-story Aspire, which also has offices, according to a city spokeswoman.
CitiTower “is a special building, and it’s catering to very high-income rents in that market,” Vail added.