STAR Real Estate Ventures Lands $323M Refi for 13-Property Portfolio

Berkadia arranged a 7-year, fixed-rate loan for each property in the portfolio, which totals nearly 4,000 units across seven states throughout the Southeast and Midwest.
Legacy of Cedar Hill. Image courtesy of Yardi Matrix

STAR Real Estate Ventures—a joint venture between El-Ad National Properties and Yellowstone Portfolio Trust—has received $323 million in refinancing for a 13-property multifamily portfolio comprising nearly 4,000 units throughout the Southeast and Midwest.

Berkadia originated a 7-year, fixed-rate loan for each property with a highly competitive spread, and the loans were purchased by Freddie Mac. The Berkadia team of Senior Managing Director Mitch Sinberg, Associate Director Matt Robbins and Director of Operations Jared Hill handled the transaction.

Located across seven states, the diverse set of properties in the portfolio have stabilized after years of ownership. The opportunity to hold on to the assets was attractive, given unchanged interest rates and disproportionate growth in secondary and tertiary markets, Sinberg said in prepared remarks.

Building up a multifamily portfolio

The properties are located in Boca Raton and Clearwater, Fla.; Macon, Norcross and Augusta, Ga.; Aiken, S.C.; Concord, N.C.; Fort Wayne, Ind.; Woodridge, Ill.; and Cedar Hill, Texas. Three of the properties are located in Florida, representing 762 units. Another five are in Georgia, totaling 1,152 units.

South Carolina, North Carolina, Indiana, Illinois and Texas each have one property with 222, 160, 256, 762 and 600 units, respectively. The 762-unit Windsor Lakes in Illinois, built in 1974 and renovated in 2003, is by far the largest asset in the portfolio, followed by Legacy of Cedar Hill in Texas, built in 2000 and featuring 600 units.

El-Ad assembled the portfolio over a six-year timespan, starting with the acquisition of Windsor Lakes from PGIM in August 2005. The latest addition to the portfolio, Legacy of Cedar Hill, was purchased from Realty Appreciation in June 2011, according to Yardi Matrix data.

The company also scooped up four properties in Georgia and South Carolina from Landmark Residential in June 2007—Park at Northside, The Manchester at Wesleyan, Traditions at Augusta Apartments and Verandas on the Green—and grabbed Melrose on the Bay Apartments in Florida from the same seller in the following month. Other sellers over the years included Du Rhone Group, Lexington Developers, Sterling Group and Barings.

Solid demographic growth in the Southeast is fueling continued investor interest in the region’s multifamily market, CBRE found in a report this year. Institutional investors and REITs are especially keen on the market, having increased their annual investment there by more than 30 percent from pre-recession levels.