Anaheim Apartment Complex Bags $30M Refi

Amberway Apartments in Anaheim has obtained a $30 million Freddie Mac loan to refinance existing debt.

Anaheim, Calif.—Amberway Apartments in Anaheim has obtained a $30 million Freddie Mac loan to refinance existing debt. According to Beech Street Capital LLC, which arranged the deal on behalf of Patrick Cadigan—who owns 10 apartment complexes in Orange County totaling over 1,600 units, and is represented by real estate investment firm Greenwood & McKenzie—the transaction was processed as an Early Rate Lock Capital Markets Execution at a rate under 4 percent.

The loan closed 90 days later, significantly reducing the prepayment penalty, which was one of the goals of the refinance. The new fixed-rate loan has a seven-year term with 6.75 years of defeasance and amortization of 30 years, with a two-year interest-only period.

Amberway Apartments consists of 272 units in 29 two-story buildings, with studios, one- and two-bedroom garden-style units. Common amenities include covered and garage parking, a fitness center, five 24-hour laundry facilities, a swimming pool and spa. The occupancy rate at the time of the refinancing was 97 percent.

Anaheim, along with much of the rest of Orange County, has seen increasing demand for apartments as residents choose rental properties, or are obliged to rent, though the market has some extra juice in the form of relatively low unemployment. As of the third quarter of 2011, the unemployment rate was 8.6 percent, which is lower than most other California counties.

Real estate investment specialist Marcus & Millichap predicts that when 2011 numbers are tabulated, apartment vacancies in Orange County will have dropped 110 basis points to 4.3 percent. Correspondingly, asking rents will be up 2.4 percent for the year, while effective rents will rise 2.8 percent. Demand is high, but less than 100 new units came on the market this year, compared with about 2,300 in 2010.