F/Advance Capital bought a 60-unit apartment complex near West Palm Beach for $17.5 million, amid a year-end surge of multifamily investment sales in South Florida.
The Miami-based private equity investment firm scooped up Melrose Apartments at 3200 North Haverhill Road in unincorporated Palm Beach County from Arch Companies, according to records and real estate database Vizzda. The buyer borrowed a $9.6 million loan maturing in 2029 from New York-based RWC Lending.
Melrose consists of three two-story apartment buildings and a clubhouse on a 4.5-acre site, records show. It was completed in 2004 and 2005.
F/Advance’s purchase breaks down to $291,667 per unit. The Hallandale Beach-based firm targets multifamily, retail and industrial investments from $5 million to over $30 million, according to its website. F/Advance’s managing partner is Demian Perelmuter.
Arch Companies paid $14.3 million for Melrose Apartments in 2022, records show. The New York-based firm, which Jeffrey Simpson and Jared Chassen launched in 2017, has been rocked with turmoil over the past year due to court battles between Simpson and Chassen and financial woes.
In October, lender CIM Group foreclosed on Arch’s 88 University Place office building in New York, alleging that the company defaulted amid in-fighting among its founders. Simpson and Chassen are locked in a legal battle, at one point attempting to fire each other. Simpson also had taken issue with Arch’s primary investor, the Wiener family, accusing family members of stirring dissent against him.
The Melrose sale comes amid a year-end surge of multifamily investment sales in South Florida, after slower activity for most of this year and last year. Higher interest rates that have remained elevated despite the Federal Reserve’s two benchmark rate cuts this year, as well as skyrocketing insurance, declining rents and slower demand led to the investment sales decline.
Generally, investment firms that bought properties used discretionary funds and either assumed sellers’ existing loans or borrowed federal agency loans that come at more attractive terms.
Last month, Greensboro, North Carolina-based Bell Partners used one of its multifamily value-add funds to purchase the 349-unit Bell Miramar Place complex at 11338 Southwest 45th Place in Miramar for $121.3 million and the 228-unit Bell Kendall West complex at 8485 Hammocks Boulevard in unincorporated Miami-Dade County for $78.5 million.
Also last month, Grand Peaks dropped $90.9 million for the 448-unit The Seven at West Boca at 10235 Boca Entrada Boulevard in unincorporated Palm Beach County. The buyer assumed the seller’s $62.3 million balance on a Freddie Mac loan.