Sometimes, it pays to strike early.

In February, West Palm Beach, Florida-based Shoreham Capital completed its sale of The Preserve at Poinciana in Florida to a state pension fund through an existing separate account managed by Chicago-based global real estate investment management firm Heitman.

Though the project recently closed, it went under contract in late 2021 — before the Federal Reserve started hiking interest rates, upending sales volume and dampening property valuations. 

“The market was very active at the time,” said Doug Faron, managing partner at Shoreham Capital, a real estate firm with single-family rental and multifamily holdings founded in 2021. “We’d seen a number of forward-sale opportunities, and we decided it would be interesting to test that market early in the Shoreham lifecycle.”

Shoreham took the property, where construction began last summer, to market through Berkadia, and Heitman emerged as a buyer. 

“We put it under contract at a price that we thought was a healthy margin and healthy profit for our investors,” Faron said. “‘We are not going to look backward and say, ‘Oh, could we have made more in the future?’ I think we're very happy. Our counterparty is a long-term hold vehicle. So hopefully, it's a win-win for all involved.”

Proximity to Tampa and Orlando

The Preserve at Poinciana is located about 40 miles southwest of Orlando. It is on 27 acres directly across from the recently completed Poinciana Community Park.

The homes come in three- and four-bedroom floor plans ranging from 2,000 to nearly 2,300 square feet. Each unit includes a two-car garage, an open-style chef’s kitchen, luxury finishes, smart-home technology and a private fenced-in yard. The community’s amenities include a resort-style pool, children’s playground, dog run and walking trails.

Shoreham is selling the homes to the state pension fund in phases. Wading River, New York-based home builder JNS Homes is constructing the homes. “JNS Homes has done an amazing job of executing on these homes, and they were willing to do that under GMP [guaranteed maximum price],” Faron said. 

Even with the industry's construction slowdown, Faron said Shoreham still has multifamily and SFR projects in development, though the company is carefully watching trends.

“We've been very cautious and very cognizant of the current capital markets,” Faron said. “There are certain projects that might have worked in the pre-reset environment, but we've been very careful when we proceed to fully appreciate the current cost of capital and construction costs.”

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