TODAY’S DEALS: Security Properties Sells 192 Units Southeast of Seattle

Security Properties exits a value-add play in Washington; Colliers closes an $11.6 refinancing in Atlanta with Prudential; and WaveCrest Capital acquires an apartment property for $8.8 million in an off-market transaction.

Newcastle, Wash.—Security Properties Inc. has sold Newport Crossing, a 192-unit community located in Newcastle, Wash., about a 13 mile drive from downtown Seattle. The property was acquired back in 2012 for $30.4 million. It sold today for $38.8 million, following a value-add renovation implemented by Security Properties and its affiliated management firm, Madrona Ridge Residential.

The asset was originally built in 1990, and is located in a town-center setting. Newport Crossing was the fifth investment for Fund I, which acquired a total of 17 properties. The fund launched in June 2011, and will now have 15 remaining assets after the sale.

“The purchase, renovation and sale of Newport Crossing reflects our overall strategy of pursuing multifamily real estate investment opportunities in high-growth western markets characterized by sustainable job and population growth, significant barriers to development and high homeownership costs,” says David Dufenhorst, CEO of Security Properties. “In this property, we saw substantial opportunity to add value and the surrounding submarket had all of the traits we look for: a dynamic economy, solid demographics, attractive amenities and excellent transit access.”

As part of the renovation, Security Properties and its joint venture partner, an east coast insurance company, invested $1.5 million to repaint and reroof in the buildings, redesign the community pool and improve landscaping and upgrade unit interiors.

Colliers closes $11.6M with Prudential to refinance Atlanta portfolio

Castleberry Hill jpegAtlanta—Colliers International Atlanta’s capital markets group has closed an $11.6 million refinancing with Prudential Mortgage Capital for the three-property Castleberry Hill Multifamily Portfolio in Atlanta. The trio of Class A properties are located in the Castleberry section of Atlanta near the under-construction Atlanta Falcons Stadium. The communities—Stonewall Lofts, Legacy Lofts and Intown Lofts—have a combined occupancy of 91 percent.

H.J. Russel & Co. built three the assets in 1998 through 2003. They total 143 units. Colliers International national director of transit-oriented development Rod Mullice and senior vice president Kevin Troy represented an H.J. Russell & Co. affiliate in the transaction.

“Prudential became comfortable with the Castleberry Hill Portfolio because of its proximity to the Vine City MARTA station and Georgia Dome/Georgia World Congress Center/Phillips Arena/CNN Center MARTA station,” says Mullice. “These properties are an example of the leadership H.J. Russell has shown over the last 20 years in developing transit-oriented development projects.”

WaveCrest Capital acquires property for $8.8M in off-market transaction

Diablo ApartmentsSan Francisco—WaveCrest Capital Management LLC, a Walnut Creek-based real estate investment firm, in partnership with its Southern California-based family office partner, has acquired the Diablo Villas Apartments, a 48-unit multifamily property in Concord in an off-market transaction valued at $8.825 million. The seller, a local Bay Area Lender affiliate, had foreclosed on the property in late 2010.

Built in 1964, the gated community underwent a complete interior and exterior renovation in 2008— 2010 with the intent to re-sell the units as Condominiums. The 100-percent occupied market-rate project, which is being rebranded as CityPlace Apartments, consists of 12 two-story buildings of two bedroom, one and a half bathroom and two bedroom, two bathroom units averaging 913 square feet amenitized with hardwood floors, stainless steel appliances, in-unit washer/dryers, balconies, patios and community pool. WaveCrest, founded by Rich Jones in 2009, has acquired more than $11 million of Bay Area multifamily assets in 2014.

“We recently bought an apartment project near Monterey but have been circling the Highway 24/680 apartment  markets for quite some time,” said Jones.  “We jumped at the chance to acquire the property when our broker presented it to us, because it fits our value-added investment objectives on multiple levels. It also helps that it was deliverable as an off-market REO. Because the project is completely rehabbed and in great shape, much of the capital risk is taken out of the equation, and we can immediately focus on re-tooling the operating expenses and moving the rents to market to further enhance its position in the marketplace.”

The San Francisco Office of American West Bank provided the acquisition financing and WaveCrest was represented on the purchase by Patrick Nash and Chris Sparacino of Bay Apartment Advisors in Oakland, Calif.

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