West Palm Beach Multifamily Market Sees $87 Million Apartment Tower Sale

In a notable transaction, Woodfield Development has successfully sold a 223-unit apartment tower located in downtown West Palm Beach for $87 million. This sale marks a modest revival in the South Florida multifamily market, which has faced challenges due to rising interest rates and various economic factors.

Overview of the Sale

• Property Address: 345 Banyan Boulevard, West Palm Beach
• Buyer: Griffis Residential, based in Greenwood Village, Colorado
• Seller: Woodfield Development, in partnership with Northwestern Mutual Life Insurance Company
• Financing: The buyer secured a $57.7 million loan from Fannie Mae for the acquisition.

The tower, now known as Griffis West Palm, was completed by Woodfield in early 2023. It comprises a 15-story structure with 3,100 square feet of retail space on a nearly 1-acre plot.

Development Background

Woodfield secured a $47 million construction loan from Northwestern Mutual Life in 2021 to bring this project to fruition. The company was founded in 2005 by Mike Underwood and Greg Bonifield and initially focused on developments in North Carolina, South Carolina, and Washington D.C., before expanding to the East Coast, completing its first Florida project in 2020.

Market Trends

The South Florida multifamily market has slowed significantly compared to the bustling activity seen in 2021 and 2022. During those years, the influx of new residents fueled record demand and remarkable rental growth. However, as of late, several factors have contributed to a cooling market:

• Decrease in Influx: A slowdown in newcomers has tempered demand.
• New Apartment Deliveries: An increase in the supply of available rentals has further decreased rental growth.
• Economic Factors: Rising interest rates and escalating insurance costs have caused lenders to tighten their lending standards, impacting investment sales.

Recent Activity

Despite the challenges, some high-profile transactions have emerged in 2023, signaling potential renewal in the market:

• Amancio Ortega’s Ponte Gadea acquired the 44-story Veneto Las Olas for $165 million.
• The Toledano family’s BH Group purchased the 338-unit Wake Biscayne Bay for $83 million in February.

Key Players in the Sale

Griffis Residential, co-led by Ian Griffis and David Birnbaum, is a significant player in the multifamily sector with a portfolio that encompasses 26 communities totaling 8,000 units across 10 national markets.

Why Northwestern Mutual was Involved

While Northwestern Mutual served as a co-seller in this deal, it’s noteworthy that they have recorded no judicial foreclosure actions against Woodfield, raising questions about this partnership in the sale.

Conclusion

The sale of the Griffis West Palm tower reflects a cautious optimism within the South Florida multifamily market. As economic pressures continue to shape investment strategies, stakeholders will be looking for signs of recovery and opportunities for future developments.

For more insights on real estate trends in South Florida, consider exploring Griffis Residential’s portfolio and South Florida investment insights.