The Esplanade at City Park, a landmark apartment building overlooking Bayou St. John, recently sold to a Florida investment firm for $53.5 million.
Financing for the deal was announced this week by real estate finance group Walker & Dunlop, a national firm with a New Orleans office.
Priderock Capital Partners, based in West Palm Beach, bought the 1970s-era, seven-story building in a sale that closed Nov. 12, according to Orleans Parish court records.
The seller was RCG Longview, a partnership led by New York investor Jeffrey Feil. The group bought the property in 2006, on the one-year anniversary of Hurricane Katrina, and undertook post-storm renovations.
Feil is an owner in Lakeside Shopping Center, the three-tower Lakeway Center office complex along Lake Pontchartrain, and the land where Costco was developed in Mid-City, among other properties nationwide.
Walker & Dunlop arranged a $43.5 million, 10-year loan with five years’ interest-only through German American Capital Corp., a subsidiary of Deutsche Bank.
Stephen Farnsworth, Walker & Dunlop senior vice president, said commercial real estate capital and out-of-state investors are returning to New Orleans as the recession fades away and signs of economic growth become evident across the city.
“New Orleans is re-establishing itself as a very attractive multifamily market,” Farnsworth said.
Real estate broker Larry G. Schedler of New Orleans, who specializes in multifamily housing and handled the sale, said the property was put on the market about four months ago and quickly attracted the attention of investors both local and national.
Schedler, who worked in partnership with real estate services firm Cushman & Wakefield, attributed the widespread interest to the increasingly vibrant Mid-City neighborhood with new retail, streetcar service and other developments.
“It’s a testament to he strength and the resiliency of that market,” Schedler said.
The 446-unit, 400,000-square-foot building was put up for a sale in a market with strong rental demand. Occupancy rates hover at 95 percent or more, Schedler said, and there is a growing segment of “lifestyle renters” who can afford to buy a home but instead prefer renting higher-end homes.
“There’s probably more people in the rental market than there ever has been,” Schedler said.
According to The Esplanade’s website, the units — ranging from studio to three-bedroom — rent for between $955 and $2,555 monthly.