In the overheated sales market of 2021 and early 2022, investors had no problem buying an apartment building under construction. Any risk inherent in an incomplete project with no residents was more than offset by the ability to secure a new building in a highly competitive environment.
And, even now, after interest rate increases have caused dramatic declines in multifamily sales, buildings under construction in the right areas can still garner buyer interest. Look no further than Trilogy Real Estate Group's purchase of the Azalea Apartments, an apartment community currently under construction in the east Tampa neighborhood of Brandon, Florida.
The Chicago-based investment and property management firm purchased the 289-unit property, which sits in a Qualified Opportunity Zone, from ZOM Living for $85.8 million, according to a press release shared with Multifamily Dive. A Qualified Opportunity Zone is an economically distressed community where investment may be eligible for preferential tax treatment.
“The Opportunity Zone designation of this location will help stimulate needed investment in housing for the rapidly growing population,” Jesse Karasik, chief investment officer for Trilogy Real Estate Group, told Multifamily Dive.
ZOM Living will continue to manage the construction of Azalea Apartments, where first move-ins are projected to begin this quarter. The property will feature one-, two- and three-bedroom layouts ranging from 700 to 1,400 square feet. The units will have energy-efficient stainless steel Whirlpool appliances, quartz countertops, contemporary cabinets with upgraded hardware and hurricane-impact windows.
Azalea Apartments’ amenities include a resort-style pool deck with cabanas and a relaxation area with hammocks and a fire pit. It also has a fitness center with a spinning studio and an outdoor yoga lawn, a multi-use event lawn, a pool pavilion and a gaming area with a pool table and cornhole. The pet-friendly community will also offer a shaded, fenced dog park and pet salon, according to Karasik.
A strong location
Azalea Apartments sits 15 minutes east of Tampa’s downtown and offers proximity to major operations of JP Morgan Chase, Citigroup, USAA, Progressive Insurance and Advent Health, according to Karasik.
“Trilogy believes Tampa-St. Petersburg is one of the most exciting multifamily investment markets in the country,” Karasik said. “The region is experiencing rapid economic growth driven by secular migration trends, which will drive strong demand for multifamily housing for years to come.”
Trilogy experienced little difficulty sourcing financing for Azalea Apartments, according to Karasik. “The project’s compelling characteristics attracted the interest of multiple highly regarded lenders, which enabled us to secure relatively attractive financing terms considering the prevailing risk-off lending environment,” he said.
Trilogy owns properties in the Midwest and Southeast and continues to seek investment opportunities for its eleventh and twelfth multifamily-focused private equity funds.
“Our investment team continuously evaluates potential acquisitions and typically performs deep-dive assessments of approximately 400 opportunities each year,” Karasik said.
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