Dealmaker: Passco Cos. Acquires Florida Apartments for $63M

Passco Cos., Irvine, Calif., acquired Sea Glass Apartments in Destin, Fla., from Catalyst Development Partners, Atlanta, for $63.3 million.

Chris Black and Caleb Marten of KeyBank Real Estate Capital’s Commercial Mortgage Group arranged the acquisition financing. The JLL Florida Capital Markets team of Matt Wilcox, Jubeen Vaghefi and Denny St. Romain brokered the transaction.

The 288-unit apartment community is in the Crestview-Fort Walton Beach-Destin metro, which has the lowest unemployment rate in Florida per U.S. Bureau of Labor Statistics data. Passco Vice President of Acquisitions Colin Gillis noted the metro remained especially strong through the economic downturn.

“An influx of new jobs [in Destin] is driven largely by the leisure and hospitality increases in the market, expansions in medical and education sectors serving the explosive population growth and large increases in defense spending, benefitting the three military bases in the area,” Gillis said, noting the three military facilities employ nearly 100,000 people.

Large technology and defense contractors in the area include Boeing, BAE Systems, Lockheed Martin and L3 Technologies.

Gillis said recently delivered property leased up at a record pace, reaching 100 percent occupancy in less than seven months with no concessions. “Effective rents at the property are extremely impressive, and in many cases, they exceed rent levels for similar luxury assets in the more well-known Florida markets like Tampa and Orlando,” he said. “Additionally, the barriers-to-entry in this market are very strong on all fronts–physical, political and financial.”

The community at 4320 Commons Drive West in Destin includes studio, one-, two- and three-bedroom floorplans.