Berkadia Originates $13M for Illinois Student Housing Property

Berkadia originates $13 million for the acquisition of a student housing property; a JV between Wheelock and Iconic Development acquires a student housing complex in Virginia; and GFI Realty Services sells a Brooklyn apartment building for $7,700,000.

88 West

Champaign, Il.—Berkadia Commercial Mortgage has originated $13 million in floating-rate debt for the acquisition of 88 West, a 792-bed off campus student housing property at the University of Illinois. The borrower is a joint venture between the North Carolina-based Preiss Company, who was a new client, and the Collier Companies of Gainesville, Fla., who had worked with Berkadia before. The Preiss Company, one of the largest owners and managers of student housing properties in the U.S., will manage the company.

The loan was the first interim bridge transaction completed under Berkadia’s expanded proprietary lending program, which launched in March. Berkadia now offers short-term bridge financing (6-12 months) and interim bridge loans (2-3 years) to borrowers in core commercial property types looking to acquire and reposition properties.

The loan for 88 West features a three-year term that will allow for repositioning. The Class A garden-style property was built in 2007 with construction financing from Wachovia Bank. It features 240-units with 792 beds.

“It is a beautiful property, certainly one of the nicest, if not the nicest off campus options at the University of Illinois,” Hugh Hall, managing director of the interim loan program at Berkadia, tells MHN. “But it definitely suffered during its period in default—there had been four managers in three years which is obviously never a good sign. Our clients bought it for $.60 on the dollar of replacement cost, so they got a pretty good discount. They have the right base to put more money into the property to get it back up to where it was historically.”

Hall added that Berkadia has a very competitive program for bridge products, and expects to put together a few hundred million dollars of business this year and continue to grow the program in 2012.

JV Acquires Student Housing Complex in Virginia

Blacksburg, Va.—Wheelock Street Capital has announced that a joint venture between affiliates of Wheelock Street and Iconic Development have acquired Terrace View Apartments, a 1,720-bedroom student housing complex in Blacksburg, Va. The property serves Virginia Polytechnic Institute and State University (Virginia Tech).

The property was purchased from affiliates of The Stonemark Group, an Atlanta-based multifamily management and investment firm. Terms were not disclosed. The transaction was capitalized in part with acquisition financing provided by Fannie Mae and originated by Northmarq Capital through its affiliation with AmeriSphere Multifamily Finance LLC.

Terrace View Apartments was built between 1966 and 1979 and consists of 81 buildings containing 757 units and 1,720 bedrooms. Amenities include a junior Olympic size pool, clubhouse, fitness center, playground and dog run. The acquisition is Wheelock Street’s first student housing acquisition and first joint venture partnership with Iconic Development.

“We are delighted to be entering the student housing business with the acquisition of Terrace View Apartments,” says Merrick Kleeman, a managing partner of Wheelock Street Capital. “Working with our partner, Iconic Development, we expect to strategically upgrade the asset to take advantage of demand for high quality, well-maintained, well-managed student housing serving the Virginia Tech market.”

GFI Realty Services sells elevator apartment building for over $105k/unit

Brooklyn, N.Y.–GFI Realty Services Inc. participated in the sale of 300 Linden Boulevard in Brooklyn for $7,700,000.

The six-story elevator apartment building consists of 72 apartment units totaling approximately 58,000 square feet. Josh Orlander of GFI Realty Services represented the seller, Bronstein Properties, in this transaction and Erik Yankelovich, also of GFI Realty Services, represented the buyer.

“300 Linden Blvd was a rare opportunity to acquire a large number of units in one elevator building with below average market rents,” says Erik Yankelovich. “The property traded for nine times the gross rent multiple and at $105,000 per unit, which for today’s market is an aggressive purchase price.”

“The buyer believes in the long term strength and stability of the Brooklyn rental market,” says Josh Orlander “He recognized the potential upside in the current rents and is planning to capitalize on it.”

The rent-stabilized Flatbush elevator apartment building was built in 1949. 300 Linden Boulevard has approximately 30 indoor parking spaces and is located close to Downstate Medical Center, Kings County Hospital, Prospect Park and Brooklyn Botanical Gardens as well as major retail thoroughfares on both Flatbush and Church Avenues.