TODAY’S DEALS: Starlight Multi-Family Fund Buys a Texas Portfolio

A Canadian fund makes its first investment with a Texas acquisition; Militello Capital and QR Capital purchase two communities in Georgia; and Canyon funds a $42 million senior construction loan.

Houston—Toronto-based apartment fund Starlight U.S. Multi-Family No. 2 Core Fund has completed the acquisition of interest in a portfolio of two apartment communities located in Houston and Austin. The properties have a combined 752 units and carried an aggregate purchase price of approximately $63.6 million. Funding was provided with $16.8 million in cash proceeds from the fund’s IPA, $25.0 million in cash from a new mortgage financing, and the assumption of mortgages in the principal amount of approximately $21.8 million.

The transaction involved acquiring a 65 percent interest in the Falls at Eagle Creek, a property located 16 miles northeast of downtown Houston. In connection with the acquisition, the fund assumed existing mortgages on the property in the amount of $21.8 million maturing in October 2016, with two, one-year extension options at an all-in interest rate of 3.98 percent per annum. The property is comprised of 412 apartment suites in 18 three-story, walk-up buildings.

The fund also indirectly acquired Palm Valley Apartments, a property located approximately 19 miles north of downtown Austin at 1301 North A.W. Grimes Boulevard, in Round Rock, Texas. The fund has secured a first mortgage loan on the property in the amount of $25.0 for a three-year term with two, one-year extension options at an interest rate of LIBOR + 2.00 percent per annum. The property is comprised of 340 apartment suites in 17 three-story, garden style buildings on an 18.6-acre site, ranging in size from one bedroom to three bedrooms.

Militello Capital invests in two Georgia properties

Catersville & Atlanta, Ga.—Militello Capital has invested in Rosewood Apartments in Cartersville, Ga., and Collier Ridge Apartments in Atlanta. The group acted in partnership with QR Capital to acquire the two rental assets in Atlanta’s MSA.

Rosewood Apartments is a 148-unit community that was completed in 1991. It is situated on 9.6 acres and consists of eight residential buildings. Collier Ridge Apartments is a 300-unit community located on Defoors Ferry Road in Atlanta. It sits on 38.8 acres and consists of 49 buildings.

“We are pleased to partner with QR on the acquisition of both Rosewood and Collier Ridge,” says Bill Militello, CEO and co-founder of Militello Capital. “These investments are consistent with our approach to partner with first class real estate operators that have extensive local knowledge, access to off market transactions and a track record of delivering value to their investors.”

Canyon funds $42M senior construction loan

Los Angeles—Canyon Capital Realty Advisors LLC has provided a $42.0 million senior construction loan to an affiliate of Griffin Real Estate Management to complete the construction of a partially constructed 264-unit Class A multifamily community set on 13 acres in the City of Riverside, Calif.

The project site, located at the corner of Riverwalk Parkway and Sierra Vista Avenue, is currently under construction by Griffin Real Estate Management, a fifth-generation, California-based homebuilder that has developed more than 40,000 homes. When complete, the property will feature 264 one-, two- and three-bedroom apartments within a gated community that features extensive common area amenities, including a clubhouse, fitness center, media lounge, resort-style pool and barbecues. The project is part of the Riverwalk Commons master-planned community.

The first units will be ready for tenants to move in as soon as Spring 2014, with the completion of the entire project expected by October 2014.

“Canyon Realty is pleased to provide the financing necessary for the completion of this project, which promises to provide much-needed quality housing to this highly desirable area of the Inland Empire,” Canyon Realty President Jonathan Roth says. “This investment highlights our continued interest in dense infill communities in Southern California, and is also consistent with our investment focus of providing capital to experienced real estate operators with a strong record of success.”

The project will benefit from several local market attributes, including a strong residential market driven by limited housing supply and the community’s proximity to major employers, including the Riverside Kaiser Permanente Medical Facility, the Riverside Regional Technology Park and the University of California, Riverside. The project is in immediate proximity to the La Sierra University Campus and Alvord School District campuses, and is accessible to several freeways as well as the Metrolink train service.

“Canyon Realty has a tremendous track record working with companies like ours to develop best-in-class projects across the United States,” says Paul Griffin III of Griffin Real Estate Management. “With Canyon Realty’s financing in place, we are positioned to carry out the long-term vision for Riverwalk Commons and create highly desirable new housing options for the local community.”

The mix of apartments at the project will include one bedroom/one bath units averaging 751 square feet, two bedroom/two bath units averaging 1,044 square feet and a limited number of three bedroom/three bath units averaging 1,153 square feet. In-home amenities will include high ceilings, crown moldings, central air conditioning, oversized private patios, granite countertops, stainless steel energy efficient appliances and walk-in closets for most units.


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