TODAY’S DEALS: RREEF Acquires Three Communities for $151M
RREEF acquires three properties totaling 561 units for $151 million; ST Residential closes on a condo development in Miami Beach; and Red Capital Partners provides a $4.1 million balance sheet bridge loan for acquisition of bank-owned property.
Chicago/Seattle—RREEF has acquired three properties in two separate transactions. All were purchased through the RREEF America REIT II fund. Cityfront Place, a multifamily tower in Chicago, was purchased for $107 million. Eden Hill and Sweetbrier, two communities in Seattle, were bought for $44 million.
Cityfront Place is located at 400 North McClug Court along the Chicago River. The 40-story, 480-unit tower was built in 1991. Residents have unobstructed views of Lake Michigan and easy access to public transportation.
Eden Hill and Sweetbrier are both four-story properties located at 1925-2111 Queen Anne Avenue North in Seattle’s Queen Anne submarket. The properties were completed in 2008 and 2009 and include 81-units and 27,000 square feet of ground retail.
“The high standards to which Eden Hill and Sweetbrier were constructed and our plans to further renovate and enhance the operational efficiencies of Cityfront Place, combined with our expectation that market fundamentals will continue to improve in each of these premier markets, presents compelling investment opportunities for our investors,” says Kevin Howley, portfolio manager, RREFF America REIT II.
ST Residential closes on a 202-unit condo in Miami Beach
Miami Beach, Fla.—ST Residential has acquired Artecity, a 202-unit mixed-used condominium development in Miami Beach, Fla. The six-building community has sold 43 units to date, leaving 159 condos open.
“Artecity has the potential to be a world-class property given its great location,” says Wade Hundley, chief executive officer of ST Residential. “We are excited to own this property as we believe we can finish the development with a few enhancements that will make it a jewel amongst our already desirable portfolio.”
ST Residential is led by Connecticut-based Starwood Capital Group and Texas-based TPG, along with WLR LeFrak and Perry Capital. The group was formed after the Chicago-based Corus Bank failed in September 2009. The FDIC was looking for a new real estate partner to handle the residential assets and construction loans, and ST outbid seven rivals to acquire the $4.5 billion real estate loan portfolio with a combined bid of $554 million for 40 percent of the equity in the joint venture with the FDIC.
Red Provides $4.1M bridge loan in 30 days for acquisition of bank-owned property
Atlanta–Red Capital Partners LLC recently used its balance sheet to provide a $4.1 million bridge loan with a 24-month term to Wilkinson Corp. of Yakima, Wash.
The loan facilitated the purchase by Wilkinson Properties Fund VIII of a bank-owned property and was structured with options to extend the loan term up to 36 months. The loan most likely will be refinanced utilizing non-recourse FHA Section 223(f) mortgage insurance, a permanent loan option provided by affiliate entity Red Mortgage Capital LLC, the nation’s highest volume FHA/HUD multifamily and healthcare lender.
Weatherly Apartments, located about 10 miles northeast of Atlanta’s central business district, is composed of 16 garden-style, two-story apartment buildings containing 144 one-bedroom and 80 two-bedroom units. The new owner intends to invest approximately $4,000 per unit in renovations and capital improvements and amenity upgrades.
“We are very excited about the addition of this asset to our portfolio. After completion of the improvements and implementation of a focused management effort, we feel confident that it will produce outstanding results for our investors,” states Russell L. Wilkinson, founder and chairman of the Board of Wilkinson Corp. We had a short timeframe in which to secure this asset. Red not only performed on time, delivering financing in 30 days from engagement to closing, but also delivered on the terms they stated at the outset. The combination of their knowledge, work ethic and commitment to growing a relationship is a rarity these days.”
Kimra Holcomb, executive vice president of Wilkinson Asset Management, the multifamily property management arm of Wilkinson Corp., adds, “After the economic downturn in 2008, we had been watching carefully for signs of recovery in and around Atlanta because historically this area has had strong growth. When we began to see signs of recovery in the first quarter of 2011 with positive job growth, we knew it was an opportunity to make an investment. We thank Red for going above and beyond to help us secure this property and allowing us to capitalize on what we believe to be a great opportunity.”
“It was a pleasure working with the Wilkinson team on this acquisition bridge loan. The 30-day closing was a total team effort and we are excited to grow our relationship with Wilkinson as they expand their multifamily portfolio,” says Jeffrey C. Ringwald, managing director of Red Mortgage Capital LLC and RED’s lead banker who arranged the interim loan and will be involved in delivering a permanent solution.