Existing Apartment Sales Update Presented by: Darron Kattan.

20th Annual BAAA Developers Forum

Existing Apartment Sales Update

Presented by: Darron Kattan

Darron Kattan Bio

With career closings exceeding $1.5 billion, Darron Kattan, Managing Director and a multifamily brokerage specialist, focuses on properties in Central, West Central, and Southwest Florida. He has been hired by private clients with large portfolios, single properties, institutional owners, national lenders, community banks, and servicing companies of all sizes. Mr. Kattan has experience with Class A, B, and C properties as well as affordable low-income housing tax credit (LIHTC) and housing and urban development (HUD) transactions. Prior to joining Franklin Street in 2008‚ Mr. Kattan was Vice President/Investments at Marcus and Millichap for nine years. His impressive sales record has been recognized with the following Franklin Street awards: 2009 - 2014 Sales Achievement Award winner, 2010 overall company Top Earner. He was named a 2013 40 Under 40 Professional by Real Estate Forum. Mr. Kattan is also an active member of Florida University’s Bergstrom Council in Tampa, the Real Estate Investment Council (REIC), and National Multi Housing Council (NMHC). Mr. Kattan graduated from the University of Florida with a Bachelor of Science in Public Relations and is a licensed real estate broker in Florida, Georgia, Alabama, Mississippi, North Carolina, and South Carolina.

About Franklin Street

Topics

• Stats- Boring but Insightful Metrics• Cycle Factors- This Time Its No Different• Lenders- Wall Street Returns• Buyers- Spike the Punch Bowl• Case Studies- How Did that Happen• Future- Not So Bold Predictions

Price Per Unit (2003-2014)

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 20140

10000

20000

30000

40000

50000

60000

70000

80000

90000

Source: Costar – Multifamily Sales 50+ Units, Tampa Bay MSA

$82.5k/unit $85.6k/unit

Price Per Square Foot (2003-2014)

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 20140

20

40

60

80

100


$90.73/ft$96.72/ft

Price Per Unit (By Decade Built)

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

$160,000

60's

70's

80's

90's

00's

Peak Year

Trough

Year

Average Price/Unit

60's Build $62,451

70's Build $50,962

80's Build $59,847

90's Build $94,5992000's Build $108,538


Price Per SF (By Decade Built)

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014$0

$20

$40

$60

$80

$100

$120

$140

$160

60's

70's

80's

90's

00's

Trough

Year

Peak Year

Average Price/SF60's Build $67.9670's Build $59.0980's Build $69.5490's Build $88.91

2000's Build $95.24


Cycle Factors- This Time Its No Different

• Supply & Demand– Inventory– Buyers– Lenders

• Global, Political & Economy Related– Jobs– Growth– Recessions- Global and National– Regulatory– Regime Stability/Instability– Interest Rates

Lenders- Wall Street Returns

New lenders every day. In 2008 couldn’t find more than a handful of lenders, now there are many options

• CMBS• Agency (full term IO)• Non Recourse• Balance Sheet & Bridge• Recapitalizations are Up Significantly

Leveraged buying power moving up so fast its creating new wealth out of thin air.

Buyers- Spike the Punch Bowl

Old Timers

Fast Moving Smart Money

New Syndicators

Experienced Syndicators

First Timers, Out of Area Buyers, Foreign Money, OPM With No Conscience

Banks & Servicing Companies

“Bartenders”

Buyers- Spike the Punch Bowl

• How Do You Identify?• Who do you Align Yourself With?• How Long Does it Peak, How Hard Does it

Fall?– Replace the old adage of location, location,

location with timing, leverage, location

Case Studies- How Did that Happen

• Avesta Portfolio– 13 Properties, 2199 Units. Central/West Florida– Closing Price $81,363,000 ($37k/unit)– Cap Rate with Adjusted Taxes, T12 Income- 6%– Overall C Class Portfolio– South Florida Based Syndicator– CMBS 1st Debt– Preferred Equity from Multiple Sources Including

Foreign Capital– Stable Assets, Buyer Perceived Value Add Through

Management Efficiencies and Increasing Rents


• Sandanay & Stonehenge– 100 Units, Tampa– Closing Price $3,050,000 ($30k/unit)– Cap Rate with Adjusted Taxes, Normalized Expenses

and T12 Income - 7%– C Class Deal, Needed Rehab– Foreign Buyer– Low Leverage, Non-Recourse Loan– Buyer looking for price per pound, place to park

money, economies of scale with other recent purchases (4th acquisition in Tampa)


• Windemere– 180 Units Dunedin– Closing Price $10,000,000 ($55k/unit)– Cap Rate With Adjusted Taxes and T12

Income- 4.5%– C Class Deal, A Class Location– Local Buyer, Out of Area Equity– Massive Rehab, Solid Property with 20+ Year

Owner

Future- Not So Bold Predictions

• Crash will be 2018• Unanticipated Cause—Not Interest Rates• Wall Street Will Be Involved

And finally, someday I will likely go back to just being a bartender. When that happens, drinks are on me!

Contact Information

Darron Kattan

Managing Director

[email protected]

Franklin Street Real Estate Services

500 N. Westshore Blvd.

Suite 750

Tampa, FL 33609

Direct: 813.658.3355

Cell: 813.477.1993

mailto:[email protected]

Existing Apartment Sales Update Presented by: Darron Kattan.

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