3650 REIT Originates $103M Portfolio Loan

Grandview at Lake Murray in Columbia, S.C. Image courtesy of Lake Murray Drive Apts LLC

A joint venture between David Werner Investments, Onyx Partners and Carlton Associates has secured a $103 million mezzanine loan from 3650 REIT recapitalizing their Southern Residential Portfolio, a 12-property bundle of multifamily asset with more than 3,500 units across four states.

3650 REIT originated the loan, which has an initial 24-month term, from its Bridge and Event Driven lending platform. Drew Anderman, senior managing director of Meridian Capital Group, and Eddie Haber, a Meridian vice president, arranged the mezzanine financing for the Southern Residential Portfolio, which has assets in Georgia, Louisiana, South Carolina and Tennessee.

Jonathan Roth, 3650 REIT co-founder and managing partner, described the joint venture as repeat borrowers, noting in prepared remarks that the Miami-based lending platform has a strong relationship with the joint venture partners. Roth lauded the properties in the portfolio as historically well-occupied, diversified assets.

The Southern Residential Portfolio comprises more than 3.7 million rentable square feet and has a mix of one-, two- and three-bedroom apartments with an average size of 1,020 square feet. Units feature private balconies or patios, in-unit washers and dryers, walk-in closets and soaking tubs. Nearly one-third of the units have recently been renovated and interior renovations are continuing.

Eight of the assets are located in South Carolina:

• Grandview at Lake Murray, 2170 North Lake Drive, Columbia
• Heights at Lake Murray, 100 Walden Heights Drive, Irmo
• Lauren Ridge, 500 Carlen Ave., Lexington
• Promenade at Boiling Springs, 901 Dornoch Drive, Boiling Springs
• River I and River Run II, 901 Meridian River Run, Spartanburg
• Reserve at Mill Creek, 2350 Freedom Blvd., Florence
• Haven at Market Street, 8034 MacBean Loop, Aiken

Other properties in the portfolio are Haven at Reed Creek, 303 Wave Hill, Martinez, Ga.; Haven at Knob Creek, 1185 W. Mountain View Road, Johnson City, Tenn.; The Saulet, 1420 Annunciation St., New Orleans; and Gates at CitiPlace, 2500 Gates Circle, Baton Rouge, La.

Multiple REIT deals

While other lenders have pulled back or been unable to fund existing commitments due to high cost of capital and a challenging macroeconomic environment, 3650 has executed multiple loan transactions in the second quarter. Most recently, the firm’s Stable Cash Flow lending platform refinanced Brookview Commons, a 264-unit multifamily community in Danbury, Conn., with a $58 million loan. In early May, 3650’s BED lending platform originated a $49.5 million loan for Hillcrest Acquisitions to complete construction of The Gabriel, a 288-unit multifamily property in the Huntsville, Ala., market. The firm also had a strong and active first quarter and has a growing pipeline of origination opportunities, according to Roth’s remarks. In the first quarter, the firm closed on seven loans comprising $240 million across multiple asset classes and had approximately $13.6 billion of loans in servicing.

Last December, 3650 originated a $76.5 million construction loan from its BED lending platform to finance completion of Elevate Apartments, a 293-unit multifamily community in Dania Beach, Fla., being constructed by Royal Palm Cos.