$26M Financing Earmarked for Houston Portfolio
- Feb 21, 2019
Solid Goods Corp. has received $26 million in loans to refinance Villas at Cypresswood, a 270-unit community in Houston, Texas, and Lakewood Apartments, a 256-unit building in Tomball, Texas.
Capital One provided 10-year, adjustable-rate Fannie Mae loans for the two apartment communities. Both loans have an interest-only provision.
“This was full term, interest only, cash-out, with a lower spread than the existing loan,” Vincent Punzi, Capital One Multifamily Finance’s vice president, told Multi-Housing News. “The borrower is a long-term investor and we were able to refinance the portfolio on a 10-year term.”
In 2009, Solid Goods purchased Lakewood Apartments, located at 11000 Gatesden Drive, roughly 30 miles from downtown Houston. The property offers one- and two-bedroom townhomes and offers easy access to Vintage Park Shopping Village and Willowbrook Mall. The community is also close to FM 1960 Road E., Texas State Highway Beltway 8 and Tomball Tollway.
“The Cypress/Fairbanks submarket has consistently outperformed the broader MSA with regard to vacancy, and rent growth is expected to remain strong through 2022,” Punzi added. “Regarding the Houston MSA, total job growth has gradually accelerated, and the year-over-year pace again matches the national average.”
Picking Up After the Storm
Solid Goods originally acquired the Villas at Cypresswood, located at 9844 Cypresswood Dr., in 2007. The property features one-, two- and three-bedroom units. It is close by Vintage Park, Willowbrook Mall and the Kickerillo-Mischer Preserve.
In August 2017, Hurricane Harvey caused $2 million worth of damage to the property when the first floor was flooded. Occupancy quickly decreased to around 50 percent. Since the storm, all repairs have been finished and the community is nearing stabilization.
“The sponsor used out-of-pocket funds to renovate Villas at Cypresswood,” Punzi said. “The refinance allowed the sponsor to replenish savings and the reduction of debt service increased their cash flow.”
Both properties in the portfolio are gated communities and boast a pool and fitness center.
“We appreciate that Capital One took the time to get comfortable with our lease-up strategy,” Virgil Benton, Solid Good’s president, said in prepared remarks. “This transaction has enabled us to reduce our debt service substantially while allowing us to cash out a portion of our equity.”
Earlier this month, Capital One provided $22.4 million, three-year acquisition financing to FCP for the acquisition of Chroma Park, a 210-unit property in Austell, Ga.
Images courtesy of Capital One