Security Properties Acquires Interest in Four Assets

Security Properties purchases an interest in four West Coast communities; Crescent Resources begins a 303-unit luxury development in Durham, N.C.; and Walker & Dunlop supplies a $6M loan under Fannie Mae's Early Rate Lock.

Chelsea Heights

Tacoma, Wash. / Beaverton, Ore.—Security Properties Inc. has announced that its sponsored fund, Security Properties Multifamily Fund, has acquired interests in four properties totaling 380 units. The fund will continue to invest in additional properties over the next two to three years, creating a portfolio that should eventually total between 1,500 and 2,000 units.

“It’s no secret that multifamily investments are the subject of much attention by investors and the media,” says Ed McGovern, managing director of capital markets for Security Properties. “There are strong arguments from a supply and demand perspective, which are backed up by solid demographics, indicating that the trend toward renting should continue in the coming years.”

The acquired properties include the mixed-use Chelsea Heights in Tacoma, Wash., and a portfolio of three assts in Beaverton, Ore. Chelsea Heights is a 78-unit condo to apartment conversion that sits atop 19,000 square feet of commercial space. In Beaverton, Security Properties partnered with The Praedium Group to acquire a 302-unit portfolio comprised of Richmond Park, Richland Terrace and Willow Grove. The mid- to late-1980s vintage properties are likely candidates for an upgrade.

Stage set for 303-unit development by Crescent Resources

Circle Ninth Street

Durham, N.C.—Crescent Resources has completed the acquisition of a six-acre site in Durham, N.C., and is set to immediately begin construction. The project, Circle Ninth Street, is a 303-unit luxury community located adjacent to Duke University. The first apartments are expected to be ready for occupancy in the fall of 2012.

“This irreplaceable site is ideal for multifamily residential with its close proximity to the entertainment and dining venues in the Ninth Street District, Whole Foods, Duke University and Duke’s medical campus that employs more than 32,000 people,” says Brian Natwick, president, Crescent Resources’ multifamily division.

Circle Ninth Street will feature units that incorporate a mix of reclaimed industrial materials and modern aesthetics, and is designed to meet LEED certification requirements. The four-story buildings will open to several private outdoor amenity areas, including a central lawn, community park, dog park, pool and fitness courtyard. Indoor amenities will feature a lounge, wireless café, gaming room, demonstration kitchen, group study area, business center, screening room and fitness center.

The project has a cost of $47 million, which is being financed by an equity investment from Crescent Resources and financing through U.S. Bank N.A. and Pearlmark Real Estate Partners LLC.

Walker & Dunlop supplies $6M under Fannie Mae’s Early Rate Lock

Charlotte, N.C.—Walker & Dunlop LLC announced it recently provided a $6 million financing for Delta Crossing, a garden-style residential apartment community located in Charlotte, N.C. The acquisition loan was structured with a 10-year term with two-years interest only and a 30-year amortization under Fannie Mae’s Early Rate Lock Program. The loan was underwritten to an 80 percent Loan-to-Value with a 1.25 Debt-Service Coverage ratio.

The sponsor of the transaction, Cortland Partners, comments, “Establishing a presence in Charlotte has been a strategic objective for Cortland. With the help of Stephen Farnsworth and Walker Dunlop, we have accomplished that objective with the purchases of Delta Crossing and Cameron at Hickory Grove and look to increase our investment in the market going forward.”

Delta Crossing is a 178-unit apartment community built in 1989 situated on over 22 acres. The multifamily complex offers one-, two-, and three-bedroom floor plans featuring washer/dryer units, walk-in closets and balconies/patios. Property amenities include a clubhouse with a full kitchen, fitness center, swimming pool, two playgrounds and controlled access. Delta Crossing was 94 percent leased at closing.