In his second sale to an Affordable Housing developer this year, Reese Stigliano, president of Stigliano Commercial Real Estate announces the sale of a 6.69 acre land parcel to AGPM Acquisitions, LLC, an affiliate of Orlando-based affordable housing developer, Banyan Development Group LLC.
The parcel, located at 1550 Ortiz Avenue in Fort Myers, FL closed on July 30th. Stigliano represented the Seller, RHS Urban LLC.
The parcel, which sold for $800,000, is zoned for 105 residential units. The sale was aaccording to Stigliano. While most Affordable Housing Developers do not close until they obtain financing, this buyer purchased the land on a speculative basis.
The biggest challenge facing Affordable Housing Developers is the time it takes to secure financing. Financing, which usually takes the form as Low-Income Housing Tax Credits (LIHTC), can take 18-24 months. LIHTC provides federal tax credits to developers for building income-restricted housing. Those individuals or corporations receive a dollar-for-dollar tax credit which provides the incentive to develop low-income housing. Those tax credits provide the project with additional equity during the construction phase, which helps to make it less expensive to build and maintain an affordable apartment complex.
“During the financing approval period, the developer must obtain and maintain control of the property usually through a Purchase & Sale contract.” said Stigliano “Most Sellers are not willing to have their property tied up for that long of a period. By purchasing this parcel, the developer controls the land at a reasonable price per unit and eliminates the need to negotiate a long-term purchase agreement with an owner who may or may not have the patience or desire to wait for the buyer’s financing to get approved.”
Reese Stigliano is a recognized leader in the South Florida commercial real estate market, with over 35 years of experience. As President, he focuses on land sales, investment sales and office leasing for the firm. Stigliano’s ability to unravel the complexity of major commercial transactions has been the key to success throughout his career.