Orlando Business Journal, 15 Aug 2008

A Michigan real estate investment firm plans to take advantage of the slow real estate market to snap up several distressed Central Florida apartment complexes at bargain prices, adding to its growing local portfolio.

Ann Arbor, Mich.-based McKinley Inc. reportedly is looking for more Central Florida sites, such as the Park View Village apartments in Winter Park, which is near its two existing complexes: Azure Apartments, 304 units McKinley acquired in May 2007, and Indigo, 319 units it bought in April 2006.

McKinley executives could not be reached for comment.

However, Tim Endicott, a senior sales associate at McKinley's Azure Apartments in Winter Park, said McKinley continues to seek out units that were sold to individual buyers, while improving landscaping, interiors and relationships with tenants at newly acquired properties.

"They 'McKinley-ize it,' " Endicott said. "They come in, and in a matter of 30-90 days, you see a difference on the property."

McKinley, which has owned apartment complexes in Central Florida since the mid-1980s, in June bought the former 324-unit Heron's Cove apartments on State Road 436 near Orlando International Airport and renamed the complex Bellagio.

Since late last year, the company also has been buying additional units. For instance, McKinley bought more than 400 units for $27.1 million in June from HP Sunvest Development LLC at Harbor Beach near the airport, a project that converted to condos last year but now is offered as apartment homes.

In addition, McKinley bought hundreds of units at Waldengreen in the Millenia area between January and July of this year, and Crossings at Conway at Michigan and South Orange Avenue between November 2007 and May of this year, according to Orange County records.

All told, McKinley reportedly has spent more than $300 million during the past 18 months to buy nearly 3,000 foreclosed units in Florida, and by the end of this year, it plans to own more than 5,500 apartments in Central Florida valued at $550 million, according to a July 30 report by the Ann Arbor News.

"McKinley's got a solid reputation for getting deals done," said Enon Winkler, senior vice president of capital markets for Jones Lang LaSalle in Orlando. "They're definitely ahead of the curve on how they purchase properties where most investors find it challenging to obtain favorable financing."

McKinley Inc

Assets: $1.97 billion, 117 properties including 18,148 apartments and 6.25 million square feet of commercial space in 10 states

Core markets: Florida, Michigan, Indiana, Ohio, Illinois, Virginia, Georgia, Kentucky, North Carolina and South Carolina

Local holdings: 15 apartment or condo communities in Orlando, Winter Park and Daytona Beach