Refinancing Of Seven CA Communities Generates $15M
- Jul 05, 2016
Los Angeles—Universe Holdings has completed a strategic refinancing of seven multifamily properties in California totaling 559 units and $124.8 million in gross value, which generated $15 million in proceeds for new acquisitions and asset improvement programs.
“We are a value add investor. There are two ways to capitalize on well-managed investments. The first is to sell, the second is to refinance to free up equity developed by long-term performance—appreciation, rent growth and improved operations. Since we have owned these properties for between 10-18 years, we decided to employ a recapitalization strategy to keep these properties in our portfolio and maintain their positive cash flows while still returning a good portion of the original principal to our investors,” Henry Manoucheri, Universe Holdings’ founder and CEO, told MHN. “Proceeds from recapitalization can then be redeployed towards new investments so we can continue to grow our portfolio of holdings.”
Charles Halladay, managing director with HFF, secured the loans on behalf of Universe through HFF’s Freddie Mac Program Plus® Seller/Servicer Program and Sabal Financial’s Freddie Mac Small Balance Program.
The refinanced properties consist of the 50-unit Isles of Charm in Los Feliz; the 172-unit Nantucket Creek in the San Fernando Valley; the 53-unit Chateau Lakeside in Van Nuys; the 82-unit Chateau Woodley Hart, also in Van Nuys; the 52-unit Chateau Regent in North Hollywood; the 56-unit Chateau Spring Terrace in La Mesa; and the 94-unit Chateau Spring Hill, also in La Mesa.
“We plan to use a healthy portion of the refinance proceeds towards taking the properties to the next level,” he said. “Renovating unit interiors, adding amenities, repainting buildings and upgrading common areas. This is something we address across our portfolio every four to five years to ensure we are operating our properties to their highest potential.”
According to Manoucheri, Universe Holdings has developed a business model focused on creating value through strategic acquisitions in researched submarkets, hands on operations and long-term cash flows from optimized management.
“Rather than sell these assets to capitalize on the value we have created through hands on management, refinancing allows us to free up capital for new investments and keeps what we consider to be top performing buildings in our portfolio for long-term hold,” he said.
Currently, Universe Holdings has a portfolio of apartment communities totaling more than 2,000 units located at diverse properties throughout Southern California’s top urban, suburban and coastal submarkets.