Mesa West Capital Earmarks $125M for 4 CA Properties
- Jan 23, 2018
A private West Coast multifamily investment firm has received $125 million in short-term first mortgage debt to finance the recent acquisition and repositioning of four California multifamily properties.
Mesa West Capital secured five-year, floating rate financings for the investor to cover its new properties in the San Francisco Bay Area, Orange and San Diego Counties.
“In the current market, opportunities to finance infill workforce housing with cash flow and an experienced existing sponsor provides Mesa West strong risk adjusted returns due to reduced volatility,” Brandon Bachner, Mesa West Capital’s vice president, told MHN.
The four properties to receive financing included the 186-unit Atlantic Apartments in Alameda, the 116-unit Mosaic Hayward in Hayward, the 102-unit Villas at Carlsbad in Carlsbad, and the 116-unit Vista del Rey in Tustin.
The investor acquired all four properties, which provide workforce housing in infill locations, over the course of the last six months from three different sellers in three separate deals.
“Each of the properties is located in a solid, infill location with durable demand drivers that provided new ownership an opportunity to more efficiently manage operations to maximize value,” Ronnie Gul, Mesa West Capital’s principal, said. “We’ve worked with this client on a number of similar transactions over the years and they have a solid track record in adding value to similar infill assets, through thoughtful, targeted renovations and active, professional management.”
At the time of the acquisitions, all four apartment units needed capital upgrades and a more focused management. The portfolio was nearly 95 percent leased at below market rents at the time of the financing.
According to Bachner, part of the loan proceeds will be utilized to cure deferred maintenance and assist in funding of various renovation programs. Planned improvements include work on the exterior presence and common area amenities, as well as interior upgrades being done on a unit-by-unit basis.
Jake Roberts and Anita Paryani-Rice of IPA Capital arranged the financing.
He added that all four properties are situated in major metro first-ring submarkets, and show strong and lasting multifamily market fundamentals.