TODAY’S DEALS: Campus Crest Completes the Purchase of Two JV Properties

Campus Crest Communities acquires a full interest in two joint venture properties; Marcus & Millichap lists a luxury rental in Valdosta, Ga.; and George Smith Partners arranges $15.2 million in debt and equity financing for a Denver high-rise.

The Grove at Valdosta

Moscow, Idaho & Valdosta, Ga.—Campus Crest Communities Inc. has closed on the purchase of the remaining 50.1 percent interest in The Grove at Moscow, Idaho, and the remaining 80 percent interest in The Grove at Valdosta, Ga., owned by its joint venture partner Harrison Street Real Estate. The company utilized $43.5 million of proceeds from its recent common equity offering to fund the $16.2 million purchase price and retire $27.3 million of mortgage indebtedness secured by the properties.

The Grove at Moscow opened in 2009 and serves the University of Idaho. It was 97.4 percent leased as of March, 31 2012. The Grove at Valdosta opened in 2011 and serves Valdosta State University. It was 98.8 percent leased as of March, 31 2012. Campus Crest anticipates a nominal capitalization rate of 7.2 percent for the next 12 months.

“Selective acquisitions of the HSRE joint venture assets continue to be an excellent avenue for our company to grow its wholly owned portfolio,” says Ted Rollins, co-chairman and chief executive officer at Campus Crest Communities. “These assets, which the company developed and operates, have demonstrated strong pre-leasing and operational results, and are located at universities we believe have attractive market characteristics.”

Luxury community hits Georgia market for $29.5M

The Resdences at Five Points

Valdosta, Ga.—Marcus & Millichap Real Estate Investment Services has secured the exclusive listing rights for The Residences at Five Points, a 264-unit luxury community located in Valdosta, Ga. The listing price of $29.5 million equates to $111,742 per unit.

“The Residences at Five Points is a high-quality multifamily asset located on the single-most advantaged land parcel in Valdosta,” says Jay Brigel, senior associate at Marcus & Millichap’s Tampa office. “Local professionals, students from nearby Valdosta State University and military personnel from Moody Air Force Base create a significant tenant base for the property.”

The property was built in 2011 on 14.8 acres. Amenities include a clubhouse, fitness center, game room, swimming pool, dog park, car wash and on-site movie theater.

George Smith Partners arranges $15.2M in debt and equity for high-rise

Wellshire Arms Apartments

Denver—Commercial real estate investment banking firm George Smith Partners (GSP) has successfully arranged financing on behalf of its client, Bruckal Properties Inc., for the acquisition and rehabilitation of Wellshire Arms Apartments, a 107-unit, upscale multifamily high-rise in Denver, according to Vice President Malcolm Davies. Davies was assisted by Vice President Michelle Lee in the transaction, which included $10.9 million in debt and $4.3 million in equity.

Bruckal Properties Inc. intends to modernize the well-known building with new elevators, roofing, and exterior paint, as well as renovate the building’s units and common areas using a portion of the financing secured by GSP.

“This property represents a one-of-a-kind opportunity in the Denver market. Our team immediately recognized the potential for a substantial return on investment, based on two factors:  the rents being collected were well under market value, and the property was in need of improvements,” explained Davies. “The project required an extremely quick close, and we were successful in drawing upon our extensive network of lenders and equity providers to find sources who had worked together in the past, and were prepared to invest in this asset after understanding the potential return.”

According to Davies, the financing GSP secured for its client funded not only the acquisition, but also extensive renovations, which Bruckal Properties will undertake in order to elevate the property to Class A status.

The senior, non-recourse loan closed at one-month LIBOR +575 with a 6.5 percent floor for 36 months, and included an amortization of 25 years with a two year IO and a 74 percent loan-to-close ratio.

“The project underwriting included a significant increase over the property’s in-place rents, which was a large value-add component for Bruckal Properties,” noted Davies. “Our team was able to fully underwrite market rents and identify appropriate comparable properties, which allowed us to work quickly and successfully to close the transaction within three weeks.”

“I commend Mr. Davies and his team at George Smith Partners for being able to put this deal together within tight time constraints,” said Myles Bruckal, president of Bruckal Properties Inc. “GSP’s network produced several great options, and we believe we ended up with the right fit. We are excited about this opportunity, and appreciate the cooperation of the sellers who built and owned this landmark building since 1962. We are looking forward to continuing the legacy of this great property.”

Wellshire Arms Apartments is located at 2499 South Colorado Boulevard in Denver. The 12-story, high-rise apartment community contains 107 units featuring one-, two- and three- bedroom floor plans that range from 800 to 1,500 square feet.


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