TODAY’S DEALS: EdR Creates JV for $88M Off-campus Development in Minnesota

EdR, GEM Realty Capital and Schenk Realty Group begin a development; Centerline refinances $61.4 million in bank loans for a portfolio of properties on Long Island, N.Y.; and HFO completes a $19.7 million sale in Oregon.

University of Minnesota Off-Campus Development

Minneapolis—EdR Inc. has formed a joint venture with GEM Realty Capital and Schenk Realty Group to develop and own an off-campus asset at the University of Minnesota in Minneapolis. EdR will be a 50 percent owner and will manage the community. Construction of the $88 million asset in the Dinkytown neighborhood two blocks from campus has already begun.

“The opportunity to add another strategically well-located collegiate housing community at a school such as the prestigious and vibrant University of Minnesota in conjunction with two highly regarded partners is exciting,” says Randy Churchey, president and chief executive officer of EdR. “Both of these companies have a long history of success in our industry and we anticipate that this partnership will lead to more opportunities to create value for our shareholders.”

“This infill development at the University of Minnesota capitalizes on each of the partners’ respective strengths,” says Jared Schenk, president of Schenk Realty Group. “We hope that this project will provide a model to pursue additional well-located opportunities throughout the country.”

Completion of the 308-unit, 901-bed community is scheduled for the summer of 2014. Amenities will include an indoor swimming pool and basketball court, fitness center, bicycle storage area, outdoor deck with a grilling area, Zen gardens, and an outdoor plaza. The asset will also contain 25,000 square feet of retail.

Centerline refinances $61.4M in bank loans for portfolio of properties on Long Island, N.Y.

New York—Centerline Capital Group, a provider of real estate financial and asset management services for affordable and conventional multifamily housing, and a subsidiary of Centerline Holding Company, announced it has provided $61.4 million to refinance a seven-property multifamily portfolio located throughout Nassau and Suffolk counties on Long Island, N.Y. The loan was funded through the Fannie Mae DUS Program.

The loans—all with 20-year terms and 30-year amortizations—were used to pay off existing loans from several local banks. The borrower is comprised of various affiliates of Fairfield Properties, a firm that is the largest owner/manager of multifamily properties on Long Island.

“Fairfield is owned by the Broxmeyer family, an experienced local owner and manager that today successfully manages almost 15,000 apartment units,” commented George Haase, director in the Mortgage Banking Group at Centerline. “They are a family-run company that actively updates all their assets to like-new condition and are known for putting their familiar curb appeal on all their properties.”

Fairfield currently owns approximately 6,000 units, and it acts as third party manager on 9,000. The financing provided carries a conservative loan-to-value ratio, and offers the option for supplemental financing on each asset during the term of the loans should there be a need—an option not offered by most lenders.

“The properties are located in markets with solid real estate fundamentals, a strong demand for multifamily housing, and geographies with historically strong occupancy rates,” continued Haase. “These demographic factors, along with the strong sponsorship, made this an attractive deal for Centerline. We are pleased that we were able to simultaneously rate lock and close the loans for all seven properties in the portfolio to best meet the needs of the sponsor.”

HFO completes $19.7M sales in Portland

Avalon Park

Tigard, Ore.—HFO Investment Real Estate has closed the sale of Avalon Park, a 192-unit community in the Portland suburb of Tigard. The sales price was $19.7 million. Tandem Development Co., a private Oregon-based investor, acquired the property. San Francisco-based Hamilton Zane and Co. was the seller.

Avalon Park was considered a value-add investment. It is a low-density, garden-style community with a recently renovated clubhouse and its own private eight-acre riverfront park.



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