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Case Study: The Sound @ Navarre Beach
Quick Facts:
• Type: Ground-Up
• 250 unit luxury property
• Completed in 2016
• Investment: $5.5M
• Total project cost: $32M
• Cash on cash return: 30%
• Annual cash flow: $781K
• Years held: 7
• Sold: $60.5M
• Profit: $28M
• IRR: 41%
The Sound at Navarre Beach is a 250 unit luxury property located in Navarre, Florida. It’s located across the street from a Walmart, next to a
children’s hospital, 19 minutes away from Eglin Air Force Base, and in a beautiful area. The city has a history of low unemployment rates and
steady rent increase rates, making it an ideal location for a multi-family property like The Sound. Multifamily Development Process
Talos was approached by HUD to take over this ground-up project when the previous developer wasn’t going to cross the finish line. Talos
Holdings is a HUD-approved developer and has a history of a strong relationship with HUD, so they wanted this project to be completed by a
developer they trust. After acquiring the project in 2014, it was completed two years later in 2016. It was held for seven years until it was sold
in 2021. The Sound quickly achieved 98% occupancy, which was maintained through several rent increases prior to when it was sold. Maximizing Returns with No-Brainer Offers
When The Sound was put on the market, it received 26 total offers. But, none of these aligned with Talos’s “no-brainer” investment strategy. The
offers honored the price that Talos established, but requested things like 90-day due diligence, 120-day close, minimal earnest money, which was
not release to seller. Eight months later when The Sound was put back on the market, there was a lack of supply, which significantly increased the
sell value of the property. That’s when a no-brainer offer came in, with a 30-day due diligence, significant earnest money, at an evaluation $12
million more than 8 months previous. Having the patience and discipline to recognize a no-brainer offer significantly benefited Talos’s investors. 
