Loci Capital Divests Multifamily Asset in Orlando
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Insights
Completion of the divestment of Pomelo Park Apartments by Loci Capital is a strategic move that reflects the company's ability to navigate a challenging capital market. The divestment is particularly noteworthy given the current economic climate, characterized by rapidly increasing interest rates. This transaction demonstrates Loci's adeptness at project execution and asset stabilization, as evidenced by the sale being completed on budget and profitably.
The divestment provides liquidity and could potentially lead to a distribution for Loci's investors, which is a positive outcome in a market where capital preservation is paramount. The successful stabilization of the asset within a relatively short timeframe suggests strong operational capabilities and market demand for real estate assets in the Southeast Orlando area. Investors should monitor Loci's future fund investments, as their ability to build a margin of safety and focus on driving alpha at the asset level may offer resilience against macroeconomic headwinds.
The sale of Pomelo Park Apartments is indicative of the health of the garden style apartment community market in the Lee Vista / Narcoossee submarket. Despite broader economic challenges, the Southeast Orlando real estate market appears to be robust, allowing for the successful completion of construction and subsequent sale of the property. This could signal continued investor interest in multifamily properties in the region.
Furthermore, the involvement of Newmark, a prominent real estate advisory firm, in the sale process suggests a well-executed marketing strategy, which likely contributed to the successful divestment. The expertise of such firms in navigating complex transactions can be crucial in achieving profitable outcomes for property developers and investors alike. Stakeholders in the real estate market should consider the implications of this sale on property valuations and investment strategies in similar markets.
The divestment of Pomelo Park Apartments amidst a difficult capital markets environment underscores the resilience of the real estate sector, even as it contends with macroeconomic pressures such as rising interest rates. The ability of Loci Capital to execute its business plan and drive distributions for investors despite these headwinds is a microcosm of the broader economic landscape, where well-capitalized and strategically positioned firms can still find success.
The transaction may also reflect broader economic trends, such as the attractiveness of real estate as an investment class during periods of inflation or market volatility. This divestment could be seen as a bellwether for the real estate industry's potential to offer stable returns in uncertain times. It also highlights the importance of location, project management and partnership synergy in achieving successful real estate investments.
“We are pleased to announce the divestment of Pomelo, which will ultimately result in a distribution for our investors in what remains a difficult capital markets environment,” said Garrett Francis, Managing Principal and Head of Capital Markets at Loci Capital. “Despite the rapid increase in interest rates and difficult capital markets environment, the project was completed on budget and sold profitably, a testament to our joint venture partner, Maifly Development.”
Loci and its development partner, Maifly Development, formed a joint venture in February 2021 to close on the 8.4-acre parcel that would ultimately become Pomelo Park Apartments. The joint venture finished construction in January 2023 and stabilized the asset in August 2023, after which it pursued a marketed process to sell the property. The successful sale process for the asset was run by Newmark, including Scott Ramey (Vice Chairman), Brad Downing (Director), Patrick Dufour (Vice Chairman), and Paul Grant (Associate).
“We remain dedicated to executing the business plan of our fund investments and driving distributions for our investors,” commented Michael Phillips, CEO and co-founder of Loci Capital. “The margin of safety we build into our investments, along with our focus on driving alpha at the asset level, has allowed us to continue to perform despite macroeconomic headwinds.”
About Loci Capital
Loci Capital is a leading middle market private real estate investment firm based in
About Newmark
Newmark Group, Inc. (Nasdaq: NMRK), together with its subsidiaries (“Newmark”), is a world leader in commercial real estate, seamlessly powering every phase of the property life cycle. Newmark’s comprehensive suite of services and products is uniquely tailored to each client, from owners to occupiers, investors to founders, and startups to blue-chip companies. Combining the platform’s global reach with market intelligence in both established and emerging property markets, Newmark provides superior service to clients across the industry spectrum. For the year ending December 31, 2022, Newmark generated revenues of approximately
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Loci Capital
Casey Wilson
cwilson@locicapital.com
+1.808.221.0074
Source: Loci Capital Group, LLC
FAQ
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