IEC Lands $146M Refi in Southern California
The financing package includes a loan from Freddie Mac.
Interstate Equities Corp. has closed on $146 million in first mortgage and preferred equity funding for the refinancing of The Bryant at Yorba Linda, a 400-unit Class A community in Southern California. The loan was arranged by Walker & Dunlop.
Walker & Dunlop Capital Market team members Managing Director Chris Botsford and Senior Managing Director Jeff Burns arranged a five-year senior mortgage loan from Freddie Mac for IEC. The fixed-rate loan features full-term interest-only payments. Senior Managing Director Justin Nelson and Associate Director PJ Feichtmeier, also from Walker & Dunlop Capital Markets, secured preferred equity capital from a leading institutional owner and multifamily operator. The amounts of each part of the financing package were not broken down and the organization providing the preferred equity capital was not disclosed.
Botsford said in prepared remarks that layering preferred equity on top of the Freddie Mac loan enabled Walker & Dunlop to deliver the most effective capital strategy for IEC. Noting that the agencies remain a reliable and strategic capital source, Botsford said the transaction reflects the ongoing strength of the five-year fixed-rate agency loan market and underscores that clients continue to prioritize five-year fixed-rate paper in the current interest rate environment.
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IEC acquired the garden-style Orange County property in January 2022 for nearly $206 million from Resource REIT in a record-setting deal. At the time, it was largest transaction ever recorded in the Yorba Linda/Anaheim Hills area. IEC secured a $153.2 million acquisition loan from Invesco Real Estate, also in January 2022, according to Yardi Research Data. Resource REIT had purchased the asset from AvalonBay Communities for $118 million in June 2015, the same source shows.
When it purchased the community in 2022, IEC was planning to continue property upgrades that had begun under Resource REIT.
Property highlights
Located at 25550 Riverbend Drive, The Bryant at Yorba Linda has 50 two-story buildings across 27.76 acres. The community has a mix of one- and two-bedroom apartments ranging in size from 800 to 1,128 square feet, with an average of 997 square feet. The mean rent is $3,016, according to Yardi Research Data. The property is 95.8 percent occupied.
Apartments at The Bryant have open layouts, high-end finishes and patios or private balconies. Features include fireplaces, vaulted ceilings and in-unit washers and dryers. Community amenities include a clubhouse, fitness center, resident lounge, swimming pool and spa as well as a playground, dog park and sport court for tennis and pickleball. The property has 600 parking spaces.
The property is situated in one of Orange County’s most affluent neighborhoods with top-rated K-12 schools, hiking trails, golf courses, parks, premier shopping and easy access to employers including several Fortune 500 companies. The community is also near cultural and educational landmarks including The Bowers Museum and Richard Nixon Presidential Library & Museum. It is 2 miles north of State Route 91, connecting the property directly to Orange County, Los Angeles and the Inland Empire.
Other IEC Properties
In July, IEC completed the $43 million purchase of Sienna and Sienna Park, two adjacent multifamily communities in Tacoma, Wash. totaling of 248 units, from Goodman Real Estate. Goodman had acquired the 168-unit Sienna Park property in 2003 from Pierce County Housing Authority for $7.1 million, according to Yardi Research Data. In 2015, the company had purchased the 80-unit Sienna from a private seller for $6.1 million and then merged the two properties. Sienna Park, built in 1988, has 17 buildings with one- to three-bedroom floorplans. Built in 1986, Sienna has eight residential buildings, including two townhomes.
IEC also completed a $45 million recapitalization of The Gates at Marina, a 136-unit community in Marina, Calif., in April 2024. That deal involved securing a five-year, $24.8 million Fannie Mae loan and securing an equity partner – a co-mingled fund advised by Clarion Partners. IEC acquired the 1987-built property in February 2021 for $39.4 million aided by a $29.5 million loan from CrossHarbor Capital Partners, according to Yardi Research Data. The garden-style community has 19 two-story buildings across nearly 7 acres.
