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SCI Real Estate Investments Acquires a $75M, 1,000 Unit Apartment Portfolio in Ft. Myers, Florida

Posted on: Wednesday, 2 June 2004, 06:00 CDT

SCI Real Estate Investments is pleased to announce the acquisition of a 3 building, $75 million apartment portfolio of 1,000 units located in Ft. Myers, Florida. SCI acquired the properties in joint venture with Naples Realty of Florida. SCI and Naples will each hold a 50% equity interest in the portfolio. SCI's Scott Derrick negotiated the joint venture with Naples' Alan Schiffman, and Jamie B. May and Trish Barton of JBM Realty Advisors represented the sellers.

SCI acquired the property with its private investor group. SCI is one of the nation's largest 1031 TIC investment sponsors. However, due to the loan assumptions required for this acquisition, the portfolio was not acquired by SCI's 1031 exchange investors, but rather, by SCI's and Naples' private LLC investors.

Robert Robotti, SCI CEO (Acquisitions), said, "The portfolio was under contract late last year, but the sellers did not want to close until early 2004. CAP rates have dropped in the Southwest Florida market during the past six months, so we have essentially acquired the portfolio at a below market price.

"Due to the financing requirements, we could not put our usual 1031 exchange investors into this deal, as they need to be on title to satisfy the IRS requirements for their exchange. However, we have a stable of high net worth investors who were attracted to the property due to its potential for strong cash flow and resale value. SCI also owns a portion of the property with our own corporate funds."

Two of the properties, Beach Club and Viridian, are contiguous. They are B+ in quality, garden-style, and were completed in 1991. The third property, Park Crest at the Lakes, is an A quality property, finished in 2000.

The entire portfolio was acquired for $75,220,000 with a blended 7% pro forma CAP Rate and a 4.84% fixed rate loan.

About SCI

SCI has been in business since 1994, and has a portfolio valued at $350+ million. SCI corporate offices are located in West Los Angeles, CA. SCI works closely with commercial brokers, developers and joint venture partners to identify quality retail, office & multi-family properties nationwide.

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