NorthMarq Arranges Refi for OC Community

The Sares-Regis-owned Aliso Creek Apartments in Aliso Viejo includes 535 units, three spas, 866 parking spaces and a cyber cafe.
Aliso Creek Apartments, Aliso Viejo, Calif.

Shortly after arranging a $20.5 million refinancing loan for Lenox Pointe Apartments in Warner Robbins, Ga., NorthMarq Capital has arranged $141.5 million to refinance Aliso Creek Apartments in Aliso Viejo, Calif. The financing for the owner, Sares-Regis, was secured through a serviced CMBS lender. 

Located at 24152 Hollyoak, the pet friendly community comprises 535 one- and two-bedroom layouts ranging from 795 to 1,275 square feet. Comprising 52 two- and three-story buildings, the property was constructed in 1984 and currently has an occupancy rate of 93.1 percent, according to Yardi Matrix. Interior features include stainless steel appliances, granite countertops, garden-style windows, pantries, white or oak cabinets, washer/dryer hookups, walk-in closets, fireplaces, vaulted ceilings, skylights, ceiling fans, central air and heat, linen closets and private balcony/patios. Common area amenities include:

  • fitness center
  • wading pool
  • barbecue areas
  • outdoor fireplace
  • cyber cafe with TV and lounge
  • business center
  • two tennis courts
  • playground
  • two swimming pools
  • three spas
  • laundry facilities
  • 866 parking spaces
  • garages 
  • outside storage 

The financial plan

The financing closed at 5.2 percent, 1.2 IO DCR and 78.5 percent LTV on a 4.5 percent California cap rate. The transaction was structured as a full term interest only loan, providing a long-term capital solution to the borrower and took out the senior bridge and mezzanine deal placed by NorthMarq Capital in 2014. According to Yardi Matrix, the 2014 deal was for a $140 million loan held by Prudential Financial. 

The company will securitize the pure investment Grade A note in June 2018. Two Korean institutions will split the B note. The mezzanine loan was placed with Goldman Sachs, according to Yardi Matrix. The bank took down all of the secured debt at closing and will cut the B notes prior to securitization of the senior portion. NorthMarq will service the A and B notes totaling $121.5 million. The mezzanine provider will receive direct payments on the $20 million mezzanine loan.

“We closed a highly structured transaction with a major New York investment bank. The execution was excellent and they held the ‘all-in’ spread despite market widening without re-trades,” said Executive Vice President & Managing Director Michael Elmore, who negotiated the financing for this deal. “While this was a complicated financing package, all parties worked great together including the mezzanine provider.”

Image courtesy of NorthMarq Capital