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Nov. 4, 2013

Winthrop Realty Trust Closes on a Quartet of Class A Properties

By Joshua Ayers, Senior Editor

Boston—Winthrop Realty and Trust has announced the acquisition of four Class A luxury apartment buildings that have been built to condominium specifications for an aggregate purchase price of $246 million. The communities include 44 Monroe in Phoenix; Highgrove in Stamford, Conn.; Mosaic II in Houston; and San Pedro Lofts in San Pedro, Calif.

Winthrop is expected to enter into a venture with New Valley LLC in which New Valley will acquire about 16 percent interest in the properties and Winthrop will retain about 84 percent managing member’s interest in the venture.

The Phoenix community, 44 Monroe, is a 34-story, mixed-use building that was originally built for sale as condos. In addition to the 184 residences, the building, constructed in 2008, features 1,377 square feet of retail space and eight floors of secured parking. The community’s amenities include a spa and pool with sundeck, fully-furnished clubroom, an outdoor terrace with gas grill and fire pit, a 24-hour lobby attendant, fitness center, business center and conference room.

Highgrove in Stamford, Conn., is an 18-story, 92-unit building that was completed in 2011 and features a host of amenities and services including a 24-hour doorman and concierge, valet parking, a shuttle to the metro station, fitness club and spa with steam, sauna and locker rooms, as well as a yoga studio, sky-lit indoor pool with retractable roof and Jacuzzi, walk-in climate-controlled wine cellar, movie screening room, card and billiards room dog walk area and furnished tenant guest rooms.

The 29-story, mixed-use Mosaic II in Houston is comprised of 396 units with 20,065 square feet of ground-floor retail space and was constructed in 2009. Amenities include 24-hour valet service, wellness center equipped with steam rooms and saunas, an infinity-edge pool, 24-hour concierge services and a 6,500 square foot social lounge and recreation area.

The final property, San Pedro Lofts, in San Pedro, Calif. features two residential buildings with 3,545 square feet of retail space. Amenities for the community, which was constructed in 2008, include a sun deck with barbecue area and outdoor fireplace, fitness center, secured and controlled-access parking and a community courtyard.

A $150 million loan was tied to the acquisition for Winthrop. The loan has an initial term of three years and provides for two one-year extensions with a rate of 2.69 percent a year during the initial three-year term and LIBOR plus 200 basis points during the renewal terms and requires payments of interest only.

The recent transaction comes on the heels of another in which Winthrop solidified an 80 percent-owned venture of a 184-unit garden-style community in Oklahoma City, Okla., that was built in 2010.  Winthrop, which contributed $5 million to the venture, holds preferred equity interest in the venture. The total cost of that property was $9.2 million with an interest rate of 5.7 percent and requires payments of principal and interest and will mature in February of 2021.

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