Introduction
Amid the COVID-19 pandemic and the adverse weather conditions that affected the Florida region, Wild Pines proved its resilience and was sold at a 40.3% appreciation. Discover how this multifamily property overcame challenges and delivered an equity multiple close to 2x for Ativore's investors.
The asset
Wild Pines is a multifamily community located in central Naples, Florida. The property comprises 200 residential apartments, all with similar one-bedroom floor plans and an average area of 55 m² (600 sq. ft.). The community holds particular appeal for lower-middle-income tenants, as 104 of its 200 units are part of the state's affordable housing program, which provides tax benefits for investors. Among the community's amenities are two pools, two laundry rooms, a leasing office, a clubhouse, a business center, a fitness center, and picnic areas.
Situated in a predominantly residential area, Wild Pines is just a five-minute drive from downtown Naples, providing easy access to retail establishments, hospitals, and other essential services. These characteristics reinforce the property's strong appeal to retail workers in the central area and to retirees who relocate to the city, drawn by the mild climate and the leisure activities.
Business plan
The Wild Pines business plan was structured to capitalize on a unique opportunity: the withdrawal of the previous buyer as a result of the pandemic allowed the operator to negotiate especially favorable terms for the acquisition of the asset. The property was acquired for approximately US$ 25.3 million (equivalent to US$ 126,700 per unit), in a transaction completed at a capitalization rate (cap rate) of 5.2%, above the market average of 4.9%.
The acquisition was financed with 72.1% leverage on very favorable terms, including a fixed interest rate of 3.2% per year and an initial 7-year interest-only period, supporting cash generation for investors from the outset of the project.
Built in 1968, the property had gone nearly two decades without significant renovations to the apartments and common areas. As a result, the asset was 97% occupied but with average rents of around US$ 950, well below the rates charged by local competitors at the time of acquisition.
The investment program called for a complete interior renovation of only the 96 units with rents at market value, including the replacement of appliances, countertops, cabinets, lighting, and fixtures. In addition, exterior improvements were planned, such as new roofs, landscaping, and pool renovations.
Property performance
As the renovation plan advanced, Wild Pines achieved a 42% increase in average rents between 2020 and 2022, outpacing the Naples market's growth by 10% and maintaining occupancy around 97%. However, the entire plan had to be reassessed following the passage of Hurricane Ian in September 2022. Considered one of the largest ever recorded in the state, Ian caused flooding that affected all ground-floor units at Wild Pines, reducing the occupancy rate to a low of 57.1%.
Despite this significant impact, disciplined execution of the plan allowed average rents to continue on a growth trajectory, 26.6% above the original projection.
During the reconstruction of the flood-damaged spaces, several apartments in the property were simultaneously unavailable, which limited occupancy growth. However, from day one, Wild Pines had insurance contracts covering both the reconstruction costs and the rents lost due to the closures for the work. This coverage was essential in allowing management to maintain the recovery plan without concern for immediate cash generation and contributed to a higher quality of renovations. With the affected units recovered, the property stabilized its occupancy back above 90% in the third quarter of 2024, posting net operating income (NOI) above the initial projections. In the second quarter of 2025, trailing-12-month NOI was up 20.7% year over year, which was considered an opportune moment to sell the asset. Thus, in July 2025, five years ahead of the business plan, Wild Pines was sold for US$ 35.5 million, holding the project's capitalization rate (5.7%) while achieving a 40.3% appreciation.
Returns for investors
The strong performance early in the investment allowed for distributions equivalent to 8.3% per year in U.S. dollars over the first six quarters following the acquisition. With the units affected by the hurricane, between 2023 and 2024 dividends were suspended and all cash flow was directed to reconstruction and to the implementation of preventive flood and hurricane improvements.
The asset resumed distributions in 2025, in the range of 7.2%. With its sale, the deal generated, on average, a pre-tax internal rate of return (IRR) in U.S. dollars of 15.0% per year and an invested-capital multiple of 1.8x for Ativore's investors.
