Capital One Originates $37M for 2 AL Properties
- Jun 11, 2018
Bethesda, Md.-based Capital One has originated a combined $37 million in acquisition loans for two properties in Alabama. Capital One provided a $26.5 million Fannie Mae fixed-rate loan to EBSCO Income Properties, which leveraged the loan to purchase a Class A, 336-unit apartment community called The Grand Reserve at Phenix City in Phenix City, Ala. The 12-year fixed-rate loan has eight years on interest-only payments followed by amortization on a 30-year schedule.
The company also secured a $10.5 million Freddie Mac fixed-rate loan for purchase of a 224-unit Mobile, Ala., community called Southern Oaks Apartments. The sponsor, StoneRiver Company, invests in, develops and manages a wide variety of Southeast U.S. real estate holdings, including multifamily, warehouse, retail and timberland.
The 10-year fixed-rate loan has five years of interest-only payments followed by amortization on a 30-year schedule. This loan marks StoneRiver Company’s fourth loan with Capital One. Southern Oaks is part of a three-property portfolio the company is purchasing from the PEM Real Estate Group, an owner and operator of multifamily communities in the Southeast.
Developed in 2010, The Grand Reserve at Phenix City is a gated community featuring one-, two- and three-bedroom apartments. Amenities include two swimming pools, clubhouse with fitness center, business center, playground and laundry facility. Major employers situated within 10 miles include Ft. Benning and Aflac. A Renfroe’s Market-anchored 22-acre shopping center adjacent to the property is slated to open next year
The 43-year-old Southern Oaks Apartments, featuring one- and two-bedroom residences, is situated on Mobile’s west side, a short drive to major employers Providence Hospital and the University of South Alabama. Amenities include a fitness center, swimming pool, tennis and volleyball courts, barbecue pavilion and two laundry facilities. StoneRiver plans unit upgrades to provide new appliances, flooring, countertops and paint.
The director of Capital One Multifamily Finance’s Birmingham, Ala.-based Southeast Region, senior vice president Chad Thomas Hagwood, originated both transactions.
A tight time frame represented one of the biggest headwinds facing The Grand Reserve at Phenix City deal. “Capital One and EBSCO Income Properties have a great working relationship,” Capital One Multifamily Finance’s Birmingham, Ala.-based Southeast Region senior vice president Chad Thomas Hagwood told MHN.
“EBSCO Income Properties was able to articulate its needs from the very beginning, which allowed Capital One to formulate a plan to hit all critical dates. The borrower provided all necessary due diligence on or ahead of the requested dates and remained in constant contact with the Capital One deal team, allowing them to quickly provide solutions to any issue that surfaced.”
He added Southern Oaks is an excellent candidate for a value-add strategy. “StoneRiver has the expertise, the experience and the resources to make some really beneficial changes there,” Hagwood said. “We were happy to play a role in helping StoneRiver begin unlocking this property’s great potential.”