One of the largest apartment complexes in Southwest Florida just sold. The Lennox, originally built in 1989 as Gulfstream Isles, sold March 23 for $122.2 million.
The buyer, the Dallas-based Cardinal Capital Properties, took out a $148.8 million mortgage, public records show, about $26 million more than the sale price.
The Lennox has 936 units with the sale price amounting to $130,649 per unit when looking at just the sale price, or $159,024 per unit when looking at the total mortgage. Lurin Capital had owned and, for the moment, is still managing the complex since buying it in 2019 for $109 million.
The complex is spread across 42 buildings and has access to Summerlin Road and Boy Scout Drive in Fort Myers, just west of U.S. 41. The leasing office is at 1601 Red Cedar Drive.
Cardinal Capital Properties could not be reached for comment. The apartment complex management staff declined to comment.
Rents at The Lennox start at $1,350 per month for a one-bedroom unit and $1,950 per month for a three-bedroom unit. There are no two-bedroom units available for at least 60 days.
Matt Simmons, a property appraiser for Maxwell, Hendry & Simmons, said the price seemed right considering the age of the complex. “Most value-add players are looking to get into a project and spend somewhere between $8,000 and $20,000 per unit for rehab,” he said, noting he had no inside knowledge of this particular deal.
The $26 million above the sales price amounts to about $27,777 per unit.
Potential upgrades could be anything from adding new paint, carpet and appliances to turning over entire units with new kitchens and bathrooms. “They’re financing an amount that allows them to both buy the property and also pay for extensive rehabilitation of the property,” Simmons said. “I say that with the caveat of I don’t know for certain that that’s happening.
“What the lender is focused on is, ‘OK, you want to put X amount of dollars into the property. We’ll loan you what’s consistent with the value of the project upon completion.’ That allows an investor to both buy the property and have all the cash that’s necessary to rehabilitate the project. The lender is looking to be in a position on the property where they’re comfortable with the debt.”
