Property Details
Below Market Rents  Repositioning Opportunity  NOI Growth 
Asset Profile
Multiple

LURIN: Elements on Third Apartments (St. Petersburg, FL)

St. Petersburg, FL

Multi-Family Property

This deal is oversubscribed

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LURIN Dallas, TX
LURIN
  • IRR 32.72%
  • Equity Multiple 2.24x
  • Hold Period 3Y
  • Minimum Investment $50K
  • Year 1 Cash on Cash 0%
  • Stabilized Cash on Cash 9.52% in Y2
  • First Distribution Mar 2023
  • Distribution Frequency Quarterly
  • Co-Investment 5% ($1.125M)
  • Preferred Return 9%
  • Investor Profit Share See Financials
  • Asset Profile Multiple
  • Loan-to-Value 77%
  • Current Occupancy 81%

About this Property

"Trophy Class-A Multifamily Opportunity with a Value-Add Component in St. Petersburg, FL, one of the strongest multifamily markets in the country."

-Jon Venetos, LURIN

 

Address 3201 3rd Ave N
Square Footage 363,709 sq. ft.
# of Units 431
Year Built 1962, 2019, 2021
Year Renovated 2004(1)
Current Occupancy Phase I – 99%
Phase II – 98%
Phase III – 60%
(81% average)
Market Occupancy 96%
Current Average Rents $1,543
Average Market Rents $2,084
Purchase Price $125,500,000
Price/Sq. Ft. $345.06/Sq. Ft.
Stabilized Loan to Value 72%
(1) Seaglass Towers was renovated in three phases 2004 (main renovation), 2012 (exterior patio doors and interior hallway doors) and 2019 (exterior paint, hallways, lobby). Sunshine Flats and Stone Lofts were built in 2019. Wood Flats and Steel Lofts were built in 2021.

Top Questions

All answers are provided by the sponsor, LURIN, or its representatives.

 

Why are you buying this property?

Jon Venetos, LURIN: "LURIN is under contract to acquire Elements on Third, a Class-A property in St. Petersburg, Florida. The asset consists of 431 units across three phases that were built in 1962, 2019, and 2021. The asset is being purchased for $125,500,000 or ~$291,200/unit. The property will represent LURIN’s 14th transaction in Florida and 2nd transaction in the Tampa Bay MSA."

"History: LURIN has been actively tracking the Tampa Bay market over the past few years looking for buying opportunities. After establishing a strong broker relationship with the Tampa JLL office following the purchase of LURIN’s first asset in the Tampa Bay MSA, LURIN was brought the opportunity to purchase Elements on Third off-market. The Seller is motivated to sell and close quickly due to their need for liquidity for their current involvement in a large development project in Miami in need of a capital infusion."

"LURIN is acquiring Elements on Third for approximately ~$291,200/unit which is priced significantly below market. Pricing for new construction multifamily properties in St. Petersburg is ranging from roughly $340,000/unit to $375,000/unit and replacement cost is roughly over $400,000/unit due to the skyrocketing cost of land and materials. With limited developable multifamily sites remaining in the peninsula, and only roughly 700 units to be delivered in the submarket over the next two years, demand for apartments in St. Pete will continue to outstrip supply and drive value for multifamily properties."

"LURIN has experience renovating and repositioning workforce multifamily properties in commensurate markets throughout Texas, Alabama, South Carolina, and Florida. LURIN plans to invest $6.05 million (or $14,045/unit) into the property to renovate interior units and exteriors, as well as to modernize exterior amenities and common areas. LURIN intends to introduce consistency with regards to management through their own in-house management team, LURIN Property Management (“LPM”). Secondly, LURIN Construction Management (“LCM”), and LURIN Construction Services (“LCS”), will efficiently deliver newly renovated units rivaling the quality of the competing assets in the area, at a discount to the competition."

 

What are the most important aspects of this investment opportunity for the investors?

Jon Venetos, LURIN:

  • Strong Market Fundamentals: The property is located in St. Petersburg in the Tampa/St. Pete/Clearwater MSA. The Tampa Bay metro area is one of the strongest multifamily markets in the country. Population growth into the area remains strong as domestic migration to affordable business-friendly Sun Belt markets continues. Powered by the strong secular demographic trends, the MSA saw annual rent growth rates exceed 15% in the second quarter of 2021, the highest increase in the nation and more than twice the national average. Tampa Bay was the #4 MSA in the country where people moved in 2020, and the #1 relocation destination for Americans who moved during the pandemic. As the affordable alternative to other coastal cities like New York, Los Angeles, and Miami, the area continues to attract a wide variety of workers. Currently, the Tampa workforce has recovered to 98% of pre-pandemic job levels and continues to be among the nation’s leaders for job growth, outperforming the national average for 35 straight quarters. "
  • "Unique Trophy Asset with Value-Add Component: Elements on Third is a unique asset that offers a variety of building types which in turn offers residents varied living styles. The asset was assembled and developed through three phases by the current owner over the past 8+ years. Phase I, known as Seaglass Tower, consists of a historical high-rise tower built in 1962 and renovated in 2005 through an extensive value add program. Phase II, completed in 2019, includes Stone Lofts, which were constructed in an adapted historic office building transformed into industrial-style loft apartments and Sunshine Flats, garden-style apartments with easy walk-up living. Phase III is 2021 construction and includes Steel Lofts and Wood Flats, another transformed office building into industrial-style lofts and new-construction garden-style apartments, respectively. Elements provides a rare value creation opportunity to create a truly unique property that feels more like a resort than an apartment complex. LURIN will execute this strategy by renovating Seaglass Tower to modernize the interiors to bring them to the same standard as the other 4 building types. Additionally, LURIN will enhance and consolidate the property’s amenity package with a new pool, dog park, and outdoor recreation area in one central location. Because the property has been under construction and in lease up since 2017, rents at the property are significantly below market. Rents at Elements on Third are $400+ below rents at comparable properties within the submarket. This provides LURIN’s operations team the immediate opportunity to increase rents to market levels once LURIN assumes management of the property."
  • "Premier Location: Elements on Third is located in the Historic Kenwood district adjacent to Downtown St. Petersburg. Situated directly in the path of progress flowing west from downtown, Elements on Third offers the opportunity to invest in the next up and coming area within one of the most desirable submarkets in the county. The property has access to all the amenities and employment opportunities that make St. Petersburg such a desirable city, while also retaining a suburban feel with high-end single-family housing stock surrounding the property. Hundreds of restaurants, bars, and breweries are within walking distance from the property throughout the neighboring Grand Central, Edge, and Beach Drive Entertainment Districts. In addition to nightlife and dining, outdoor recreation features like St. Pete Beach, ranked as the #1 beach in the country, and uninterrupted biking trails are a short walk or drive away. The property is also in close proximity to over 35,000 jobs located in Downtown St. Pete, and over 280,000 jobs within a 25-minute drive to the Tampa Bay Metro’s primary employment nodes."
  • "Proven Track Record: LURIN already owns and operates 13 assets in Florida consisting of 2,527 units across four different markets including the Tampa MSA. LURIN currently manages and executes all renovations and operations with its in-house construction and property management teams. LURIN will leverage its existing infrastructure in Florida to execute the value-add strategy and execute the business plan for Elements on Third."

 

What is your investment strategy/business plan?

Jon Venetos, LURIN: "LURIN’s renovation strategy will be focused on three key areas: i) interior upgrades, ii) exterior improvements, and iii) adding additional and improving existing amenities; however, the primary focus of the value-add program will be interior renovation of Seaglass Tower, and the improvements and additions to the amenity set. LURIN will be using its in-house construction teams for both interior and exterior renovations."

"With regards to operations, LURIN will implement its proven approach encompassing; i) staffing, ii) day-to-day operations, iii) branding & marketing, iv) curb appeal and v) service improvements, through its own in-house management team, LURIN Property Management (“LPM”)."

"The business plan calls for a rehab of all 431-unit interiors of the asset, upon which time LURIN plans to continue to operate the asset and distribute funds back to investors. The estimated timeline for this is planned to be between 18 and 24 months into the project lifecycle. Once the exterior and interior renovations are complete, LURIN will continue to maximize net operating income at the property and intends to make quarterly distributions of free cash flow payments to investors."

"It is LURIN’S intention to dispose of the asset roughly 36 months into the project life cycle after fully repositioning the asset, assuming normal market conditions. That said, opportunity may exist to refinance the asset prior to 36-month period, return LP capital and cash flow the asset for a period beyond 36-months."

 

How has COVID-19 impacted your business plan?

Jon Venetos, LURIN: "COVID-19 has not impacted our business plan."

 

What are the risks and how are you mitigating those risks?

Jon Venetos, LURIN: "There are several potential operational risks associated with investment, including but not limited to:"

"i) expiration of leases, ii) unexpected delays in construction, iii) cost overruns in construction, iv) due diligence may not reveal all property conditions, v) financing and refinance risk, and vi) general local market risk for St. Petersburg, FL."

"Additional risks for this investment include an unforeseen material events such as hurricanes or a global pandemic. LURIN believes these risks are mitigated through our vertically integrated platform, controlling construction and operations. Additionally, LURIN engages third party consultants to individually insure each property against unforeseen circumstances."

NOTE: All answers provided by the sponsor, LURIN, or its representatives.

About this Property

"Trophy Class-A Multifamily Opportunity with a Value-Add Component in St. Petersburg, FL, one of the strongest multifamily markets in the country."

-Jon Venetos, LURIN

 

Address 3201 3rd Ave N
Square Footage 363,709 sq. ft.
# of Units 431
Year Built 1962, 2019, 2021
Year Renovated 2004(1)
Current Occupancy Phase I – 99%
Phase II – 98%
Phase III – 60%
(81% average)
Market Occupancy 96%
Current Average Rents $1,543
Average Market Rents $2,084
Purchase Price $125,500,000
Price/Sq. Ft. $345.06/Sq. Ft.
Stabilized Loan to Value 72%
(1) Seaglass Towers was renovated in three phases 2004 (main renovation), 2012 (exterior patio doors and interior hallway doors) and 2019 (exterior paint, hallways, lobby). Sunshine Flats and Stone Lofts were built in 2019. Wood Flats and Steel Lofts were built in 2021.

Top Questions

All answers are provided by the sponsor, LURIN, or its representatives.

 

Why are you buying this property?

Jon Venetos, LURIN: "LURIN is under contract to acquire Elements on Third, a Class-A property in St. Petersburg, Florida. The asset consists of 431 units across three phases that were built in 1962, 2019, and 2021. The asset is being purchased for $125,500,000 or ~$291,200/unit. The property will represent LURIN’s 14th transaction in Florida and 2nd transaction in the Tampa Bay MSA."

"History: LURIN has been actively tracking the Tampa Bay market over the past few years looking for buying opportunities. After establishing a strong broker relationship with the Tampa JLL office following the purchase of LURIN’s first asset in the Tampa Bay MSA, LURIN was brought the opportunity to purchase Elements on Third off-market. The Seller is motivated to sell and close quickly due to their need for liquidity for their current involvement in a large development project in Miami in need of a capital infusion."

"LURIN is acquiring Elements on Third for approximately ~$291,200/unit which is priced significantly below market. Pricing for new construction multifamily properties in St. Petersburg is ranging from roughly $340,000/unit to $375,000/unit and replacement cost is roughly over $400,000/unit due to the skyrocketing cost of land and materials. With limited developable multifamily sites remaining in the peninsula, and only roughly 700 units to be delivered in the submarket over the next two years, demand for apartments in St. Pete will continue to outstrip supply and drive value for multifamily properties."

"LURIN has experience renovating and repositioning workforce multifamily properties in commensurate markets throughout Texas, Alabama, South Carolina, and Florida. LURIN plans to invest $6.05 million (or $14,045/unit) into the property to renovate interior units and exteriors, as well as to modernize exterior amenities and common areas. LURIN intends to introduce consistency with regards to management through their own in-house management team, LURIN Property Management (“LPM”). Secondly, LURIN Construction Management (“LCM”), and LURIN Construction Services (“LCS”), will efficiently deliver newly renovated units rivaling the quality of the competing assets in the area, at a discount to the competition."

 

What are the most important aspects of this investment opportunity for the investors?

Jon Venetos, LURIN:

  • Strong Market Fundamentals: The property is located in St. Petersburg in the Tampa/St. Pete/Clearwater MSA. The Tampa Bay metro area is one of the strongest multifamily markets in the country. Population growth into the area remains strong as domestic migration to affordable business-friendly Sun Belt markets continues. Powered by the strong secular demographic trends, the MSA saw annual rent growth rates exceed 15% in the second quarter of 2021, the highest increase in the nation and more than twice the national average. Tampa Bay was the #4 MSA in the country where people moved in 2020, and the #1 relocation destination for Americans who moved during the pandemic. As the affordable alternative to other coastal cities like New York, Los Angeles, and Miami, the area continues to attract a wide variety of workers. Currently, the Tampa workforce has recovered to 98% of pre-pandemic job levels and continues to be among the nation’s leaders for job growth, outperforming the national average for 35 straight quarters. "
  • "Unique Trophy Asset with Value-Add Component: Elements on Third is a unique asset that offers a variety of building types which in turn offers residents varied living styles. The asset was assembled and developed through three phases by the current owner over the past 8+ years. Phase I, known as Seaglass Tower, consists of a historical high-rise tower built in 1962 and renovated in 2005 through an extensive value add program. Phase II, completed in 2019, includes Stone Lofts, which were constructed in an adapted historic office building transformed into industrial-style loft apartments and Sunshine Flats, garden-style apartments with easy walk-up living. Phase III is 2021 construction and includes Steel Lofts and Wood Flats, another transformed office building into industrial-style lofts and new-construction garden-style apartments, respectively. Elements provides a rare value creation opportunity to create a truly unique property that feels more like a resort than an apartment complex. LURIN will execute this strategy by renovating Seaglass Tower to modernize the interiors to bring them to the same standard as the other 4 building types. Additionally, LURIN will enhance and consolidate the property’s amenity package with a new pool, dog park, and outdoor recreation area in one central location. Because the property has been under construction and in lease up since 2017, rents at the property are significantly below market. Rents at Elements on Third are $400+ below rents at comparable properties within the submarket. This provides LURIN’s operations team the immediate opportunity to increase rents to market levels once LURIN assumes management of the property."
  • "Premier Location: Elements on Third is located in the Historic Kenwood district adjacent to Downtown St. Petersburg. Situated directly in the path of progress flowing west from downtown, Elements on Third offers the opportunity to invest in the next up and coming area within one of the most desirable submarkets in the county. The property has access to all the amenities and employment opportunities that make St. Petersburg such a desirable city, while also retaining a suburban feel with high-end single-family housing stock surrounding the property. Hundreds of restaurants, bars, and breweries are within walking distance from the property throughout the neighboring Grand Central, Edge, and Beach Drive Entertainment Districts. In addition to nightlife and dining, outdoor recreation features like St. Pete Beach, ranked as the #1 beach in the country, and uninterrupted biking trails are a short walk or drive away. The property is also in close proximity to over 35,000 jobs located in Downtown St. Pete, and over 280,000 jobs within a 25-minute drive to the Tampa Bay Metro’s primary employment nodes."
  • "Proven Track Record: LURIN already owns and operates 13 assets in Florida consisting of 2,527 units across four different markets including the Tampa MSA. LURIN currently manages and executes all renovations and operations with its in-house construction and property management teams. LURIN will leverage its existing infrastructure in Florida to execute the value-add strategy and execute the business plan for Elements on Third."

 

What is your investment strategy/business plan?

Jon Venetos, LURIN: "LURIN’s renovation strategy will be focused on three key areas: i) interior upgrades, ii) exterior improvements, and iii) adding additional and improving existing amenities; however, the primary focus of the value-add program will be interior renovation of Seaglass Tower, and the improvements and additions to the amenity set. LURIN will be using its in-house construction teams for both interior and exterior renovations."

"With regards to operations, LURIN will implement its proven approach encompassing; i) staffing, ii) day-to-day operations, iii) branding & marketing, iv) curb appeal and v) service improvements, through its own in-house management team, LURIN Property Management (“LPM”)."

"The business plan calls for a rehab of all 431-unit interiors of the asset, upon which time LURIN plans to continue to operate the asset and distribute funds back to investors. The estimated timeline for this is planned to be between 18 and 24 months into the project lifecycle. Once the exterior and interior renovations are complete, LURIN will continue to maximize net operating income at the property and intends to make quarterly distributions of free cash flow payments to investors."

"It is LURIN’S intention to dispose of the asset roughly 36 months into the project life cycle after fully repositioning the asset, assuming normal market conditions. That said, opportunity may exist to refinance the asset prior to 36-month period, return LP capital and cash flow the asset for a period beyond 36-months."

 

How has COVID-19 impacted your business plan?

Jon Venetos, LURIN: "COVID-19 has not impacted our business plan."

 

What are the risks and how are you mitigating those risks?

Jon Venetos, LURIN: "There are several potential operational risks associated with investment, including but not limited to:"

"i) expiration of leases, ii) unexpected delays in construction, iii) cost overruns in construction, iv) due diligence may not reveal all property conditions, v) financing and refinance risk, and vi) general local market risk for St. Petersburg, FL."

"Additional risks for this investment include an unforeseen material events such as hurricanes or a global pandemic. LURIN believes these risks are mitigated through our vertically integrated platform, controlling construction and operations. Additionally, LURIN engages third party consultants to individually insure each property against unforeseen circumstances."

NOTE: All answers provided by the sponsor, LURIN, or its representatives.

Offered By

LURIN

LURIN

Dallas, TX

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Assets Under
Management

Currently
$1.02B 10+ assets
Exited
$175.5MM less than 10 assets
Portfolio LTV
61.5%  
Historical
Realized Returns

Total IRR
29.9%  
Equity Multiple
2.1x  
Annual Cash
N/R  
Years Of
Experience

As Principals
less than 5 years  
In Business
6 years  
Size
125 Staff * Dedicated investor relations
* All information is reported by LURIN as of 3/12/2021.
Assets Under
Management

Currently
$1.02B 10+ assets
Exited
$175.5MM less than 10 assets
Portfolio LTV
61.5%  
Historical
Returns

Total IRR
29.9%  
Equity Multiple
2.1x  
Annual Cash
N/R  
Years Of
Experience

As Principals
less than 5 years  
In Business
6 years  
Size
125 Staff * Dedicated investor relations
* All information is reported by LURIN as of 3/12/2021.

Financials

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Offering Financial

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Location Details

St. Petersburg, FL

Jon Venetos, LURIN: "Elements on Third is located one mile west of downtown St. Petersburg. The property offers a fantastic live-work-play location with entertainment, recreation, and employment opportunities all within a short drive or walk. The property is located in the downtown St. Petersburg submarket, the most competitive and sought-after submarket within the entire Tampa/St. Pete/Clearwater metro. Elements is only three blocks north of Central Avenue, St. Petersburg’s historic entertainment corridor, providing easy access to nightlife and entertainment. Central Ave is home to hundreds of restaurants, breweries, bars, and live entertainment venues throughout the Grand Central, Edge, and Beach Drive Entertainment Districts. For outdoor adventurers, St. Pete Beach, ranked the #1 beach in America in 2021, is only a 10-minute drive away from the property, and the residents can walk to the Pinellas Trail which offers 45 miles of unobstructed walking and bike trails throughout St. Petersburg and Clearwater. Elements on Third is the closest Class-A property in the submarket to the pristine beaches in St. Petersburg. Downtown St. Petersburg offers 4M+ SF of office space and more than 35,000 jobs in a variety of occupational sectors including finance, medicine, and technology, with high profile companies such as Raymond James and the Poynter Institute having regional headquarters in the CBD. In addition to the employment opportunities in Downtown St. Pete, there are more than 280,000 jobs and 43M+ SF of office within a 25-minute drive in the Gateway, Downtown Tampa, and Westshore office hubs."

Documents

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Offering Agreement Documents

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