MIG Acquires 304-Unit Asset in Scottsdale

MIG Real Estate buys a Scottsdale asset; McCann enters San Antonio with a 324-unit buy; and Beech Street Capital assists a borrower to lock rate six months in advance in a $15 million Fannie Mae refinance.

Acacia Creek

Scottsdale, Calif.—MIG Real Estate has picked up Acacia Creek, a 304-unit apartment community located in Scottsdale, Ariz. CBRE Group Inc. brokered the sale for the seller, Equity Residential. MIG Real Estate was self represented in the acquisition. Alliance Residential will manage the property for MIG.

“Acacia Creek is situated in an excellent location within the highly desirable north Scottsdale submarket,” says Greg Merage, CEO of MIG Real Estate. “The property is a strong addition to our portfolio and we anticipate increasing resident demand and leasing activity in the future.”

The community features one-, two- and three-bedroom floor plans with full-size washers and dryers. Community amenities include three outdoor pools, a 24-hour fitness center, picnic area with barbecue grills, gated entry and mountain views. It is also located within walking distance of a movie theater, Walgreens, several restaurants and boutique shops.

McCann enters San Antonio with 324-unit purchase

San Antonio—McCann Realty Partners has acquired the View at Encino Commons Apartments, a 324-unit asset located in San Antonio. The 2001-built property will be managed by Pegasus Residential. Amenities include a clubhouse with fitness center, a swimming pool and a theater. The transaction was made possible in part by a seven-year Freddie Mac mortgage loan with a fixed rate of 3.37 percent originated by Wells Fargo Multifamily Capital.

“We have been targeting the San Antonio market for quite some time due to its dynamic job growth prospects and strong business climate,” says Brand Inlow, chief investment officer at McCann. “The acquisition of the View at Encino Commons allows us a point of entry. McCann plans to do a modest interior and amenity upgrade to the property.”

The property is a low density “Big House” product. McCann is currently looking to source apartment acquisitions in the Mid-Atlantic, Southeast and Texas.

Beech Street assists borrower to lock rate six months in advance in $15M Fannie Mae refi

Dallas—Beech Street Capital LLC, announced that it closed $15 million in Fannie Mae DUS loans to refinance a four-apartment portfolio of properties in the Dallas, San Antonio, Austin and San Angelo MSAs. Larry Sneathern, senior vice president in Beech Street’s Dallas office, originated the transaction. This was the borrower’s sixth deal with Beech Street.

The borrower was interested in refinancing to take advantage of the historic low interest rates while minimizing the prepayment penalty on its existing loans. The Beech Street team recommended that the borrower consider Fannie Mae’s extended early rate lock program. This strategy allowed the borrower to rate lock at six months prior to their closing date, mitigating interest risk while allowing time for a reduction in pre-payment penalty. “There are options for apartment owners with high interest rates late in their yield maintenance period besides just hoping that rates will stay low while their pre-payment penalty expires,” Sneathern says.

Each of the existing loans had slightly different terms. Beech Street worked closely with the borrower to analyze their portfolio, performed a yield maintenance cost/benefit analysis for each loan, and timed the resulting series of closings to maximize savings. “We worked closely with the borrower to identify those properties in their portfolio that were best suited for the extended rate lock program, and at what point it made sense to initiate the process,” Sneathern says. “The end result was increased cash flow for the borrower.” And to ensure that the borrower wouldn’t face a similar dilemma in the future, each new loan has a flexible prepayment structure.

The portfolio—Solarium Apartments, Village Green Apartments, Encino Park Apartments and La Calera Apartments—together total 625 units. The fixed-rate loans have a 10-year term with 30 year amortization. Yield maintenance is seven years.