TODAY’S DEALS: Mack-Cali Buys Two Luxury Properties in Boston MSA

Alterra

Malden, Mass.—Mack-Cali Realty Corp. has bought one property and agreed to purchase another from a joint venture including Prudential Insurance Co. of America. Both properties are located in the “Overlook Ridge in Rever” master-planned community in Malden, Mass. “Alterra at Overlook Ridge IA,” a 310-unit property, was acquired for approximately $61.3 million. Mack-Cali has also agreed to acquire “Alterra at Overlook Ridge IB,” a 412-unit property, for approximately $88.7 million.

The assets have a combined occupancy of 97.2 percent. Mack-Cali’s recently acquired Roseland subsidiary developed Alterra IA in 2004 and Alterra IB in 2008 for the joint venture, and it has managed the properties since.

“The acquisition of Alterra perfectly complements our recent acquisition of the real estate development and management businesses of Roseland and its imminent development interests at Overlook Ridge,” says Mitchell Hersh, president and chief executive officer of Mack-Cali. “We expect to place mortgage financing on the property that will provide a cash on cash yield in excess of 9 percent.”

Both assets are Class A properties with resort-style amenities, including heated outdoor pools, fitness centers, lounges with billiards, business centers, cinema screening rooms and direct access parking garages.

Johnson Capital  arranges record loan value per unit of $525,000/unit

Los Angeles—Johnson Capital announced that Sherwin Aryeh, of Johnson Capital’s Century City office, originated a $10.5 million loan secured by a premier 20-unit luxury multifamily property in West Los Angeles. At a value of $525,000 per unit, the loan is one of the highest ever funded, on a per unit basis, in the region.

The non-recourse debt, which has a loan-to-value ratio of 70 percent, was used to recapitalize current debt for the property owner, a Los Angeles-based multifamily developer. It was provided by an exclusive Johnson Capital correspondent lender, and carries a fixed rate for five years with a 30-year amortization.

The property, one of the premier luxury apartment assets in the submarket, was originally built in 2007 as a mapped condominium project. With interior finishes and appliances that are considered to be best in market, the property is achieving monthly rents close to $5,000 per unit.

Commenting on these transactions, Aryeh said, “This is a unique, well-positioned asset valued at over $750,000 per unit. Although this lies outside of the typical value spectrum for multifamily, the high quality and prime location justify some of the highest rents in the submarket. Our client has proven that there is demand for this rental product in West Los Angeles due to its proximity to some of the city’s highest-paying jobs and most expensive residential real estate. However, regardless of the positive deal metrics, few multifamily lenders will make loans higher than $400,000 per unit, which was this transaction’s greatest challenge. Working with our direct correspondent relationship, my coworker Sean Barry and I were able to understand and market the opportunity, and achieve a full leverage refinance for our client.”

Delaware asset sees $88k per unit sale

Delaware Mixed-Use Asset

Wilmington, Del.—Marcus & Millichap Real Estate Investment Services has sold a mixed use asset consisting of 64 apartments and two commercial spaces in Trolley Square in Wilmington, Del. The sales price was $5.8 million, or $88,258 per unit.

“This asset sits on arguably the strongest corner in the state of Delaware,” says Mark Thomson, vice president of investments at Marcus & Millichap. “Trolley Square is a thriving neighborhood of predominantly young professionals with a vibrant nightlife of restaurants and bars.”