Tamarack Commercial Represents Buyer And Seller In $33.2M Multifamily Portfolio Sale

A multifamily property portfolio consisting of 1414 S. St. Andrews Pl., 1510 S. St. Andrews Place, 1522 S. St. Andrews Pl., 1541 S. St. Andrews Pl., 1555 S. St. Andrews Pl., 1625 S. St. Andrews Pl., 1823 S. St. Andrews Pl., 1201 Magnolia Ave., 2200 6th Ave., 1546 S. Wilton Pl., and 1540 S. Gramercy Pl. has been sold for $33,185,000. The properties have a combined square footage of 130,085 and a price per square foot of $255. The portfolio consists of 165 units with an average price per unit of $201,121.

Summary of transaction details

• Property Type: Multifamily
• Transaction Amount: $33,185,000
• Square Footage: 130,085
• Price per Square Foot: $255
• Number of Units: 165
• Price per Unit: $201,121

TamarackCommercial, represented by David Kaufman, successfully facilitated the transaction as the broker for both the buyer and the seller. Despite the challenges posed by the COVID-19 pandemic, 25 offers were generated prior to the outbreak, with several being non-contingent. David Kaufman quickly adapted to the changing market conditions and successfully negotiated with potential bidders. Ultimately, the sellers decided to switch buyers after a renegotiation, opting for a group that demonstrated the ability to perform. The transaction was completed at 94% of the asking price set before the pandemic, with a gross rent multiplier of 13.47 and a 3.8% cap rate on current rents.

The buyer of the portfolio recognized the potential for increasing rents and adding value through property rehabilitation and the addition of accessory dwelling units (ADUs). To mitigate buyer risk in obtaining financing, a collections formula was structured. The buyer secured favorable loan terms, including a 65% loan-to-cost ratio, a 5-year loan with 2 years of interest-only payments, a conversion to a 30-year amortization schedule, and a prime rate plus 1% (4.25% floor). The buyer also benefited from a prepayment penalty of 3% for the first 18 months, which was waived upon sale or refinance.