Dan Kodsi landed an $86 million construction financing package for a 420-unit multifamily complex near Orlando.
Miami-based Royal Palm Companies plans Tuscany Village with seven four-story buildings on 21 acres at the southwest corner of State Road 46 and Upsala Road in Sanford, according to Kodsi, CEO of Royal Palm. Mattoni Group, based in Miami and led by Ricardo Caporal, is a joint venture partner on the project.
City National Bank and Abanca USA provided $68 million in loans, and Chicago-based real estate investor Origin Investments provided $18 million in preferred equity, according to Kodsi. The multifamily construction loans have floating interest rates, and Royal Palm didn’t take out a rate cap, as current rates already are elevated.
Participant Capital, a real estate investment firm founded and led by Kodsi, also contributed equity to Tuscany Village, Kodsi said. Last year, Participant launched a $250 million investment fund targeting primarily Royal Palm multifamily developments in the Sun Belt, mostly in Florida.
Royal Palm paid $12.7 million for the Tuscany Village development site at 4201 West First Street in June, Kodsi said. Construction is expected to start in the coming weeks, and the project will be completed in phases, with the full buildout expected in 2026.
Founded in 1978, Royal Palm has a portfolio of $4.7 billion worth of developed and repositioned property, as well as projects under construction, according to its website. This includes more than 9,500 completed residential units.
In Miami, Royal Palm completed the 60-story, 569-unit Paramount Miami Worldcenter condo tower in 2019. It’s developing the 50-story Legacy Hotel & Residences with 310 condos and a 219-key hotel, also at the Miami Worldcenter mixed-use complex that’s at the intersection of downtown Miami and the city’s Park West neighborhood.
The firm also is finalizing construction of the eight-story, 293-unit Elevate Apartments at 600 East Dania Beach Boulevard in Dania Beach. The building is expected to be completed late next month. Royal Palm launched leasing recently, Kodsi said.
Though Tuscany Village isn’t Royal Palm’s first development outside of South Florida and elsewhere in the Sunshine State, the firm’s decision to pursue the project now is telling of the market. Developers across the state are feeling the squeeze from elevated interest rates and skyrocketing insurance premiums. In South Florida, they also are dealing with the still high cost of concrete.
“The reason why we went to Central Florida is because we knew one advantage is you could build it out of wood. Lumber [prices] really dropped,” Kodsi said, adding that South Florida building codes require concrete construction.
Also, while South Florida apartment projects generally require garages, which are an additional construction cost, Central Florida allows for garden-style construction with surface parking lots, he said.
Other Miami-based real estate firms betting on Central Florida include Infinity Properties. In January, the firm led by Shane Decker and Brett Schlacter dropped $43 million for a 10-building industrial portfolio in Altamonte Springs. Boston-based Longpoint sold the properties, which are about 10 miles north of Orlando, near I-4.
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Dan Kodsi launches $250M equity fund for Florida multifamily projects