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Nov. 15, 2012

TODAY’S DEALS: Decron Snaps up a California Asset

Creekside Apartments

Simi Valley, Calif.—Decron Properties Corp. has picked up Creekside Apartments, a 397-unit garden-style community located at 1518 Patricia Avenue in Simi Valley, Calif. The purchase price was $70 million and Decron plans to instate a significant renovation plan for the common areas as well as unit upgrades.

“Creekside offers a tremendous value-add opportunity for our investors,” says David Nagel, president and chief executive officer of Decron Properties. “Rents are on the rise in the area, and with our planned upgrades, we see a very conservative risk profile here given that we’re really just going after what the market is already getting.”

The asset will receive approximately $9 million in upgrades that will specifically target new cabinets and countertops, new appliances and flooring, and the installation of washers and dryers in every unit. Decron will also redesign the landscaping, clubhouse, fitness center, swimming pool decks, and the front entrance.

Decron Properties Corp. currently owns and manages over 4,700 residential units with another 460 in development.

HFF secures $54M in bank, mortgage REIT financing for acquisition

Riverplace Square

Portland, Ore.—HFF announced that it has arranged $54 million in financing for RiverPlace Square Apartments, a 290-unit, Class A multi-housing community in Portland, Ore.

Working on behalf of a joint venture between Cardinal Group Investments LLC and Fundamental Advisors LP, HFF placed a $44.5 million loan with a national bank and also arranged a $9.5 million mezzanine loan with a mortgage REIT. Loan proceeds were used to acquire the property.

RiverPlace Square Apartments is located at 2083 SW River Drive, close to Interstates 5 and 405 and the Tom McCall Waterfront Park in southern Portland. Completed in 1991 and 1995, the property has 13 residential buildings with studio, one- and two-bedroom flats and multi-level townhomes with attached one- and two-car garages. The community also features 13,444 square feet of street level retail and a 302-stall public parking garage.  Community amenities for residents include a fitness center, cyber café and dog park. The sponsors’ renovation plan includes both exterior and interior improvements as part of its rebranding of the property under its urban multifamily platform, Mint Urban™.

The HFF team representing the borrower was led by Pat Burger, Tim Wright and Tom Wilson.

Cardinal Group is a fully-integrated real estate investment, development and management firm specializing in opportunistic and value-added investments throughout the United States. The firm acts as a sponsor of private equity real estate partnerships and provides asset management services through its investment company Cardinal Group Investments LLC. CGI’s affiliate management company, Cardinal Group Management, LLC (“CGM”), provides property and construction management services to all of CGI’s owned assets as well as to outside owners on a third-party basis.

Fundamental Advisors was formed in July 2007 to invest in special situations related to the municipal revenue bond market, seeking to revitalize distressed assets in such sectors as senior care, affordable housing, student housing, infrastructure and hospitality. Co-founders Laurence Gottlieb, who previously co-headed Citigroup’s Municipal Distressed & Special Situations proprietary trading desk, and Dana Fusaris, who led Madison Capital Management’s distressed and defaulted municipal bond effort, have worked together as industry colleagues or partners for over a decade.

Berkeley Point Capital provides $29.6M for a Charlotte asset

Wesley Village

Charlotte, N.C.—Berkeley Point Capital has recently provided $29.6 million in first mortgage proceeds for KBS Legacy Partners REIT’s acquisition of Wesley Village Apartments, a 301-unit Class A luxury asset located in Charlotte, N.C. The transaction was structured under the Fannie Mae DUS program as a five-year, 2.57 percent fixed rated execution with standard yield maintenance. The property, along with an adjacent vacant parcel of land, was acquired for $45.8 million.

“This marks our second transaction with the REIT and completes $600 million of business with Legacy Partners over the past six years,” says Mitch Carfield, senior managing director of Berkeley Point Capital’s Los Angeles office. “In additional to the exceptional rates that we were able to obtain on behalf of KBS Legacy Partners, this transaction required us to think outside the box and we appreciate the opportunity to add value in these situations.”

KBS Legacy Partners REIT plans to either build additional units or sell the adjacent land parcel in the future. Community amenities at the asset include a clubhouse, fitness center, business lounge, yoga studio, gaming center, swimming pool with cabanas, poolside barbecues, outdoor fireplace, dog park, controlled access, a community recycling center, and detached garages.

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