Security Properties Grabs 192-Units in Las Vegas

Security Properties enters Las Vegas with a $23 million apartment purchase; Marcus & Millichap brokers a $3.5 million rehab sale in St. Petersburg, Fla.; and Red Capital signs a $10.1 million FHA 223(f) loan with ReBuild America to preserve affordable housing.

img3Las Vegas—Security Properties has completed its first property acquisition in Las Vegas with the purchase of Desert Shadows. The 192-unit community is located near the Summerlin submarket of northwest Las Vegas, and is is the second purchase by Security Properties Multifamily Fund II.

The asset was acquired for $23 million through a joint venture with a larger institutional player. Grandbridge/BB&T Bank provided the mortgage financing, and Security Properties will use its integrated property management company, Madrona Ridge Residential, to run day to day operations. In addition, the firm plans to inject $1.1 million in capital to enhance the leasing office, paint the exterior, upgrade landscaping and enhance common area amenities. The property will also be rebranded as CenterPoint.

“The combination of a high-quality asset purchased off-market and the property’s proximity to employers and amenities made this a smart strategic investment for us,” says David Dufenhorst, chief investment officer at Security Properties.

The seller was a local developer, who built the asset in 2007.

St. Petersburg asset trades for $3.5 million

Citrus GroveSt. Petersburg, Fla—Marcus & Millichap has brokered an 84-unit sale in St. Petersburg. The property, Citrus Grove Apartments, was picked up by a local not-for-profit organization. Casey Babb, a CCIM and associate vice president investments in Marcus & Millichap’s Tampa office, handled the $3.5 million sale.

“Citrus Grove is a local real estate success story,” Babb says. “It has gone from a blighted, dangerous property with depressing living conditions in 2011, through a HUD driven change of ownership and extensive rehab between 2012 and 2013, and now another change of ownership has placed it back into the hands of a local not-for-profit ownership as a clean, safe and vibrant community.”

RED signs $10.1M FHA 223(f) loan with ReBuild America to finance affordable housing 

Columbus, Ohio—Red Capital Markets LLC and Red Mortgage Capital LLC recently provided a combination of bond underwriting and mortgage banking services related to the acquisition and rehabilitation of a low-income, seniors housing property in Arcadia, Calif.

The transaction utilized a $10.12 million conventional/taxable FHA Section 223(f) loan processed pursuant to FHA’s Low Income Housing Pilot Program and funded by Red Mortgage Capital. Proceeds of the FHA loan will serve as collateral for $10.12 million of short-term, tax-exempt multifamily housing revenue bonds issued by California Statewide Communities Development Authority and underwritten by Red Capital Markets LLC.

Naomi Gardens is a 101-unit, Section 8 subsidized elevator building in Arcadia, Los Angeles County, Calif., and was originally constructed with a HUD 202 direct loan in 1985.  The property is currently restricted to serving over age 62 seniors and the disabled, whose adjusted income is no more than 50 percent of the area median income. The recapitalization will allow the preservation of existing affordable seniors and disabled resident rental units for 55 years.

ReBuild America Inc, whose principals have been actively involved in the development, construction, rent-up, and management of over 70 affordable rental housing and supportive housing facilities for the elderly and physically handicapped, serves as general partner. ManSerMar Inc., provides management for this property as well as 58 other seniors housing facilities across the U.S.

Developer Cissy Watson of Psalms 127 LLC says, “It was a true pleasure to work with such a top notch financing and development team on the preservation of Naomi Gardens. With the collective experience of the team, along with their professional work ethic, this intricate and complex transaction came together like a well-oiled machine. Every team member played an integral part. Thanks for leading us, Rick Andrews and RED!”

Rick Andrews, Red Mortgage Capital LLC and provider of the FHA-insured loan, says, “Working with Rebuild America, ManSerMar and Cissy Watson through the prepayment process of the existing Section 202 direct loan and the new Section 223(f) Pilot preservation loan was a real pleasure…Their extensive experience with the Los Angeles HUD office and the Section 202 direct loan program made a complicated preservation process an easier task for all involved.”

Nick Hamilton, Red Capital Markets LLC, who acted as underwriter of the bonds, adds, “Such transactions are never straightforward, but the expertise and dedication of the development and financing team helped simplify a complicated process.” In closing, Hamilton says, “Recapitalization of the project with FHA debt and LIHTC equity will ensure that current and future residents enjoy safe, decent and affordable housing for many years to come.”