Florida Developer Lands $48m Loan for Luxury Apartments
Tampa-based Garrison Developer Group of Florida (GDGFL) closed on a $48m federally-insured loan to fund development of The Preserve at Alafia, a collection of 351 luxury, waterfront apartments approximately 12 minutes outside downtown Tampa. The five-story secured apartment buildings [artist's rendition pictured above], will border 1,200 feet of waterfront on the Alafia River and a 3,000-foot frontage on an adjacent wildlife conservation area in Hillsborough County, Florida. The first phase of apartments will be leased beginning in Q410, with completion of the project slated for summer 2011. “Extensive market research demonstrates that The Preserve at Alafia will fill a strong need in the Tampa area for upscale rentals located in an extraordinary waterfront setting that has previously unavailable to renters,” said Rey Ortega, GDGFL president, in an e-mailed statement Monday. Prudential Huntoon Paige, a lender of Federal Housing Administration (FHA)-insured multifamily loans, arranged the federally-backed financing to fund the first phase of development. Together, three planned phases of development will cost $100m. GDGFL's $48m commercial loan is originated at a time when FHA-backed residential financing for condominiums is evaporating, but efforts at mortgage securitization giant Fannie Mae (FNM) seek to spark financing for the Florida condo market. Late last year, the FHA released new guidelines that would constrict financing for condominiums. Since then, brokers and condo owners report that FHA financing for condos is going from a flood to a trickle. In addition, HousingWire's sources say investor activity is drying up in Florida. Fannie is looking to provide a liquidity backstop to lenders in the state, through a condo-review initiative to designate more condo projects as approved for loan delivery by lenders to Fannie. GDGFL's development loan for the Preserve, although not connected with Fannie's condo-review project, is an indication that FHA financing for the Florida rental market is still available. In conjunction with the apartments, GDGFL announced development of Alafia Crossing, a hotel-enhanced mixed-use project spanning retail, office, dining and hotel space. Alafia Crossing, the second phase of development, is about 55% committed. “To ensure we secure the optimum mix of retailers, dining and professional services for residents of The Preserve, the development team has been very careful about the types of tenants allowed into the project,” Ortega said. The final phase of development will consist of a full-service Holiday Inn to be developed by American Hotel Development Partners. Write to Diana Golobay. The author holds no relevant investment positions.