Janover has closed a $27.3 million financing package for Boca Villa Apartments in Boca Raton, Fla., through its financing platform. A New York City-based debt fund provided the non-recourse loan, which carries an initial two-year term and a 12-month extension option.
The financing package included a $7.6 million refinance of the 53-unit property, and $19.7 million in construction financing for the development of an additional 53 units. Brad Beattie, director of capital markets at Janover, coordinated the deal between the lender and the borrower.
"This deal allowed the borrower to come in with very little cash to close and featured leverage of 78% LTC," said Beattie. “The rate hikes made this deal especially challenging, but we were able to navigate through the turbulence and bring the deal across the finish line.”
Built in 1988, the property sits on 7.2 acres at 100 W. Hidden Valley Blvd., just off Dixie Highway, roughly 6 miles from downtown Boca Raton and the nightlife on Atlantic Avenue. The community comprises a mix of one- and two-bedroom apartments, featuring balconies and patios. The second phase will encompass two- and three-bedroom units. Property amenities will include a new pool, a clubhouse, and a gym.
South Florida: A Hotbed for Investment
Despite challenging economic conditions, South Florida remains one of the hottest multifamily markets in the U.S. The region saw nearly $5 billion in multifamily sales during the first half of 2022, with Palm Beach County recording an average price per unit of $379,000, exceeding the $345,000 and $300,000 registered in Miami-Dade and Broward, according to Cushman & Wakefield.
Due to strong market fundamentals, driven by positive demographic trends and continued rent growth, South Florida is expected to stay attractive to investors and developers alike, despite the rising cost of capital.
In the first half of the year, effective rents increased by 7.5% in Miami-Dade and 5.3% in Broward. Although rents in Palm Beach grew by only 0.3% during the same period, the county is still feeding off last year’s 32% gain, the largest single-year increase ever recorded in South Florida.
Effective rents averaged $2,326 in Palm Beach, the highest in the region. Additionally, submarkets such as Boca Raton, Aventura, and Coral Gables have rents averaging above $2,500, Cushman & Wakefield noted.