TODAY'S DEALS: Praedium, McDowell Buy California Asset

The Tide

Richmond, Calif.—The Praedium Group has acquired The Tides, a 200-unit community in Richmond, Calif., with McDowell Properties. The purchase price was $37 million, which equates to $185,000 per unit. This sale represented the second joint venture between the two firms in the past 12 months.

“The Tides acquisition presented an opportunity to purchase a high-quality apartment asset located in the San Francisco Bay area, one of the country’s best performing markets,” says David Dowell, director and head of acquisitions for Praedium’s Midwest and Pacific Northwest regions. “There is a strong demand for this type of high-end residence in such a prime location.”

Developed in 2004, The Tides is a gated community composed of ten three-story buildings with six different apartment layouts. Amenities include a heated pool with sun deck, an open air gazebo, gas barbecue grills, a playground, business center, and fitness center.

HFF lands $17.4M seniors housing refinancing

Chatsworth, Calif.—Holliday Fenoglio Fowler has landed a $17.4 million refinancing for Universe Holdings Development Company’s 172-unit Nantucket Creek. The 10-year, 3.88 percent, fixed-rate loan was originated through Freddie Mac. The financing replaces the property’s senior note that was originated in 2004.

Nantucket Creek is 98.5 percent leased. The property sits on 13.53 acres and has an amenity package that includes gated access, a recreation room, clubhouse, library, fitness center, pool, billiards room, shuffle board court and tennis court.

“We are very pleased with the positive outcome and the timing of this transaction,” says Henry Manoucheri, chairman and chief executive officer of Universe Holdings. “Our investors managed to improve their equity and cash flow position by participating in an orchestrated effort that concluded the complicated transaction on the day both loans were due.”

Madison Realty completes $21.5M note and deed purchase

New York—Madison Realty Capital (MRC), an institutionally backed commercial real estate investment firm and asset manager specializing in flexible debt and equity financing solutions for middle-market transactions throughout the U.S., announced that it has purchased the note and deed of 385 Union Avenue, a six-story, 53,000-square-foot residential rental property in Williamsburg, Brooklyn, for approximately $21.5 million.

The property, located within one of New York’s fastest growing submarkets, includes 47 apartments, 24 parking spaces and a gym. The seller of the loan was a bank which had taken over the original failed lender on the project through an FDIC loss-share deal. Joshua Zegen, co-founder and managing member of MRC, made the announcement.

“It was exciting to bring this transaction to a successful conclusion in less than 30 days. We were able to buy this transaction at a very attractive basis and well below replacement cost given the complexities of understanding all of the components and counterparties,” Zegen said. “Going forward, we expect that our vertically integrated platform, which incorporates debt, equity and development expertise, will unlock the true value of this fundamentally strong piece of real estate.”

At 97 percent occupied, the property is substantially complete and approaching full occupancy. The original owner had defaulted on its construction financing in 2009, and the property was placed in receivership after the original lender filed a foreclosure action.

The acquisition negotiated by Madison rescues the property from “real estate limbo” by, among other things, assuring stable ownership, providing for finishing touches on construction, and satisfying various tax and construction liens previously clouding title.

Madison’s management team intends to stabilize the property and enhance its value and visibility. Removing the uncertainty caused by financial distress will enable the building to fully compete in the market.