TODAY’S DEALS: Meridian Capital and Beech Street Arrange $90.4M for Five California Apartment Assets

Meridian, Beech Street arrange refinancing for five apartment assets; Champion buys a 304-unit rental in Ohio; and Centerline refinances a multifamily property for $3.4 million.

Orange County, Calif.—Meridian Capital and Beech Street Capital have negotiated a $90.4 million refinancing of five separate properties located throughout Orange County, Calif. Each of the deals was forward rate locked more than 90 days prior to closing with a life insurance company lender and features fully amortizing loans with fixed-rates in the mid 4 percent range. The motivation for paying off the existing loans early and incurring the prepayment penalty was driven by the benefit of locking in lower, long-term interest rates.

The five properties are located throughout Orange County in La Habra, Fullerton, Anaheim, Costa Mesa and Buena Park. Four of the five assets were built by the owner/borrower in the 1970s and have been well maintained and see consistent 95 percent occupancy.

This transaction was negotiated by Meridian Capital Group Managing Director, Seth Grossman, who is based in the company’s Carlsbad, Calif., office, and Beech Street Capital EVPs, Greg Reed and Kristen Croxton, who are both based in Beech Street’s Newport Beach office.

Champion acquires 304 apartments in Ohio

ef3898033a0064b56f7d19a9a01bce7dLewis Center, Ohio—Privately held multifamily investor Champion has acquired Oak Creek at Polaris, a 304-unit apartment community located in Lewis Center, Ohio. The apartment is located just a few minutes from Polaris Fashion Place and JPMorgan Chase & Co.

“Oak Creek at Polaris is located in the fastest-growing area of Central Ohio,” says Brian Yeager, president and CEO of Champion. “The surrounding area is booming, and we are excited to have a property so close to all the shopping, dining and entertainment options that Polaris Fashion Place has to offer. Oak Creek is by far the most affordable apartment option in the submarket. With the current overbuilding of Class A apartments, we feel that our product serves a great purpose and, more importantly, the desired price point for our valued residents.”

Champion obtained a CMBS non-recourse loan in connection with the acquisition. It has a sub-5-percent rate, fixed for 10 years. The company currently manages more than 3,600 units.

Centerline refinances multifamily property for $3.4M

New York—Centerline Capital Group announced it has provided a $3.4 million Fannie Mae DUS loan to refinance a multifamily facility located in Silver Spring, Md.

The property—Yorkshire Apartments—is a 98-unit property that was built in 1990 as the second phase of a two-phase development. The facility is comprised of seven, garden-style apartment buildings and consists entirely of two- and three-bedroom units.

The loan will be funded through Fannie Mae’s Early Rate Lock program and is a non cash-out refinance. The property is already listed in Centerline’s portfolio, and the borrower is Ralph J. Duffie Inc., a single asset LLC.

“The borrower wanted to replace their existing non-maturing loan with a new loan at a lower interest rate,” says Bryan Cullen, director at Centerline Capital Group. “Utilizing Fannie’s Early Rate Lock program, we were able to lower their debt service by $35,000 a year while maintaining an amortization of the loan in 2028.”

“I have been working with Bryan Cullen on various refinance options for years and in order to make this work we needed to have a 15-year loan at below 5 percent,” says Mark Ramsey of Ralph J. Duffie Inc. “Centerline worked quickly with us on an Early Rate Lock commitment to strike the rate before it moved above that threshold.”

Silver Spring is located in Montgomery County, a stable submarket with close proximity to major, steady employment sources and other demand generators. Market conditions in the County area are expected to continue support the property’s ability to maintain high occupancy rates and to generate adequate cash flows to service the loan.

“Yorkshire Apartments is located in a highly desirable suburb of Washington, D.C.,” continues Cullen. “It is also in good physical condition with minimal immediate repair needs. These factors, in combination with the properties curb appeal, enhance the subject’s competitiveness in the market and provided us adequate comfort regarding the quality of the collateral.”

Project amenities include a playground and 147 free surface parking spaces. In addition, the residents have access to a pool and tennis courts that are located on another property owned by the same sponsorship.

Yorkshire Apartments is managed by Grady Management Inc. Since its inception in the 1980s, Grady has managed more than 31,000 units in over 100 communities.


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