Germany’s Union Investment has billions of dollars of assets globally, but when it came time to make its first U.S. multifamily play, it picked apartments in downtown Fort Lauderdale’s Flagler Village.
The Hamburg-based investment manager, through its real estate division, bought EON Squared for $226.5 million, according to the buyer’s release. The 12-story complex stretches a full block between Northeast Seventh and Sixth streets and east of Northeast Fifth Avenue.
Seller Alta Developers completed construction of the 206-unit South Towers at 421 Northeast Sixth Street in 2019, and finished the 270-unit North Towers at 444 Northeast Seventh Street this summer. The North and South Towers each have two buildings that share a podium.
The entire complex spans 3.7 acres, property records show.
Still Hunter led the Walker & Dunlop team that brokered the deal. The price equates to $475,840 per unit.
Raimundo Onetto’s Alta, based in Miami, developed the 430,500-square-foot EON with 2 acres of indoor and outdoor amenities, according to Alta’s release. Amenities include five gyms, two pools, five game rooms, coworking spaces, a pet spa and ground-floor retail.
Units range from studios to three-bedroom apartments, with monthly rents from $1,899 to $4,182, according to Apartments.com.
EON Squared is 93 percent leased, according to Tal Peri, who heads Union Investment Real Estate’s U.S. East Coast and Latin America.
Union Investment is putting the buildings into two different funds on behalf of its investors. The South Towers will be in the UniImmo: Global fund, and the North Towers in UniImmo: Europa, Peri said. The open-end funds allow investors to enter or exit as long as they give a year’s notice. By comparison, a closed-end fund has a specific hold period for both the real estate and investors, he said.
Union Investment, a subsidiary of Germany’s DZ Bank, has roughly $482.7 billion of assets under management, with $55.4 billion of that in real estate, according to Peri.
Eon Squared’s location in edgy Flagler Village and it’s quick lease-up played a role in the decision to invest, he said. The area’s former rundown warehouses have been repurposed into businesses like yoga studios and cafes, and new apartment buildings have sprung up.
“The second building was delivered just this summer, and in four months managed to get leased up to over 90 percent,” he said. “At 270 units, it means a couple of move-ins a day.”
The South Florida multifamily market has been reaping the benefits of high demand, especially from newcomers from other states attracted partly by the region’s openness amid the pandemic.
In turn, rents have soared to explosive rates. Five of the top 10 U.S. cities that had the highest rent growth in 2021 were in Florida, according to a Zumper report. This includes Miami, where rents soared 38 percent this year.
Fort Lauderdale was not among the top five cities, but still showed a significant increase. The median rent for a one-bedroom apartment in December was $2,020 a month, the 10th highest rate, according to Zumper.
This has unleashed a flurry of investment activity. The EON deal ranks as the fifth biggest multifamily sale of 2021.
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It ranks after Cortland’s $230 million purchase of the newly built, 465-unit apartment community within the Uptown Boca development. The sixth biggest deal was AIR Communities’ $223 million purchase of the City Center on 7th complex in Pembroke Pines.