MANATEE -- A massive mortgage default that forced dozens of apartment complexes in eight states to change hands has a Palm Aire-area rental property selling to a New York buyer.
Under the terms of a $317 million mortgage restructuring, the 80-unit Palm Place Apartments was sold to The Chetrit Group for $7.5 million July 28. It is one of 56 apartment properties in the deal. In all, 5,400 units changed ownership.
According to documents on file with Manatee County, Palm Place was one of more than 20 Florida apartment properties acquired by Empire American Holdings in 2007. The New Jersey company took out a $355 million mortgage to purchase apartment complexes throughout the south and in the Rust Belt.
Empire defaulted on the mortgage three years later and its properties and debt were transferred to a special service in late 2010. Since then, the debt has been sold off in three pools. Arbor Mortgage of Uniondale, N.Y., has owned two of those pools since 2013.
The restructuring of the last pool resulted in new ownership for the bulk of the 72 apartments Empire controlled when the initial mortgage was issued.
A New York real estate investment firm, Iron Hound Management Co., negotiated the restructuring. Robert Verrone, a principal with Iron Hound, said The Chetrit Group takes on $205 million of the original debt in exchange for the apartment portfolio.
"We dedicated more than three years to crafting, negotiating and completing a complex restructuring plan to ensure the excellent long-term prospects for the properties in the loan," Verrone said.
Contacted at his office this week, Verrone said the transaction was complicated.
"In order to close this transaction, four parties had to say 'yes,'" he said.
Palm Place is one of the smaller complexes included in the sell-off. The 12-building property, located at 7693 Alicia Lane, is contemporaneous to housing just east in Palm Aire. Its units are all single story spread across 4.85 acres. The apartments are largely screened from nearby Lockwood Ridge Road by a retail strip center.
Kelly Fox, Palm Place's manager, said the only hint residents will have there has been a change in ownership are capital improvements the new owner will be making.
While the list of repairs and upgrades is still being compiled, Fox said parking lot and fence repairs will be among the first things to be completed.
Apartments in the complex rent for less than the Manatee County average. Studio apartment pricing starts at $609 per month. A one-bedroom unit rents for $720, while two-bedroom units rent for $869. Palm Place has a wait list for vacancies.
The sale is the second in the apartment market in little more than a year at the edges of Palm Aire.
In July 2014, TGM Associates of New York paid more than $45 million for the former Turnbury Park at Palm Aire Apartments.
Matt M. Johnson, Herald business reporter, can be reached at 941-745-7027, or on Twitter @MattAtBradenton.