New York, June 22, 2017 – Colliers International announced today that its Structured Finance team of Jeffrey Donnelly, Dmitry Levkov and Alexander Gornik has been exclusively retained to source $42 million in project financing for a four-story, multifamily development on Robert J. Conlan Boulevard in the town of Palm Bay, FL.
The project will consist of 320 market-rate rental units, ranging from studios to three bedrooms, and provide 75 garage parking spaces (of a total parking count of 644). Overall project capitalization is approximately $45 million, which equates to $142,000 per unit or $145 per square foot. Colliers expect to secure a construction loan of $24 million to $29 million, and preferred or joint-venture equity in the amount of $14.5 million to $17 million, depending on the construction loan leverage achieved.
The project sponsor is an Orlando-based developer in partnership with the owner of the master-planned development site. The sponsor has completed several successful projects in Florida over the last 25 years, including five-star resorts, commercial, retail and luxury residential projects. The sponsor and the landowner are also partnering to develop a 120-key, limited-service hotel and five retail/commercial structures totaling 47,250 square feet on the same site as the subject multifamily project. Colliers International has also been exclusively retained on the hotel and retail/commercial project finance, and will launch separate marketing efforts for each (but is equally prepared to entertain a comprehensive financing of all three components of the mixed-use, master-planned community with a single lender and a single co-investor).
Mr. Donnelly commented, “This is a well-conceived multifamily development within a larger master-planned, mixed-use project. The site dovetails and interacts well with Palm Bay’s broader Bayfront Community Redevelopment Plan, which contemplates multiple residential, hotel, retail and marina improvements. Our client’s project directly addresses the need for more high-quality rental product in Palm Bay and other towns near Cape Canaveral and Cocoa Beach. The project will provide a great housing option for employees of aerospace companies in the area, including Lockheed Martin, Northrop Grumman, Embraer, Harris, and Rockwell Collins.”
Mr. Levkov added “Our clients have a tremendous track record of developing five-star resorts and luxury residential projects — and with a strong discipline regarding budgets and timelines. They bring a history of on-time, under-budget development experience to this more affordable multi-family project, as well as the style and panache of their luxury experience.”
The project’s amenities, which include a resort-style pool, clubhouse, barbeque/grill area, workout room and media room, will make it a great place to live. Some units will feature views of the Indian River. The developers will deliver a South Florida-lifestyle choice just a few minutes drive from Melbourne Beach.
Mr. Gornik added, “With conservative construction loan assumptions and a well-vetted construction budget, the project provides for a robust 30% IRR. We think this preferred equity offering will appeal to a wide range of family offices, REITs and equity shops. It’s a great risk-adjusted return in a growing, healthy, dynamic region of Florida’s Atlantic Coast.”
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