Colorado Real Estate Journal - July 4, 2018
It was an “opportunistic” time for Advenir Inc. to refinance five apartment communities, including a trio in the metro Denver area. Holliday Fenoglio Fowler LP arranged the financing totaling $172.85 million for the properties comprising 1,534 units in the Denver and Houston metropolitan areas. HFF worked on behalf of the borrower, Advenir, to secure the seven-year, fixed-rate loans in five separate transactions through Freddie Mac’s CME program. The securitized loans were used to refinance existing floating-rate debt on the properties and will be serviced by HFF, a Freddie Mac multifamily approved seller-servicer for conventional loans. HFF noted it worked with the borrower in a strategy to mitigate interest-rate risk amid the current rising rate environment. The average rate across the five fixed-rate loans is 4.27 percent with rates spanning from 4.21 to 4.34 percent. The average rate at the retirement of the Libor-based, floating-rate loans was 4.47 percent with rates spanning from 4.26 to 4.86 percent. The fixed-rate conversions took the ongoing Libor adjustment risk off the table and ultimately provided the borrower with a reduction in the all-in rate for each property with additional interest-only amortization. The HFF team representing the borrower included Senior Managing Director Eric Tupler and Managing Directors Josh Simon and Cortney Cole. “We have found this to be an opportunistic time to lock interest rates with fixed-rate loans for stable properties that exhibit a long-term ownership horizon,” said Stephen L. Vecchitto, managing director and principal of Advenir Inc. “These properties provide substantial current cash flow and continued market appreciation. While the original floating-rate debt allowed for the execution of the value-add business plan upon acquisition, the new fixed-rate debt allows for interest rate stability and a longer hold time frame for the assets.” Properties in the portfolio include the 345-unit Advenir at Cherry Creek North community at 1090 S. Parker Road in Denver, the 292-unit Advenir at Cherry Creek South community at 1211 S. Quebec Way in Denver and the Advenir at Del Arte, a 351-unit property at 151 S. Joliet Circle in Aurora. Also included were the 258-unit Advenir at Eagle Creek and 288-unit Advenir at Woodbridge Reserve in Humble and Sugar Land, Texas, both suburbs of Houston. The portfolio was 94.57 percent occupied overall at the time of funding. Other News Mark Ritchie and Jasmine Polson of San Francisco-based Newmark arranged $43.4 million in financing for the Lakewood City Commons shopping center at 7740 W. Alameda Ave. in Lakewood. Newmark arranged the loan, funded through a correspondent life insurance company, for an undisclosed borrower. The 15-year loan, which features a 30-year amortization schedule, will be serviced by Newmark. The borrower, Newmark noted, plans to use the long-term financing to pay off an existing commercial mortgage-backed securities loan, cover transaction costs and recoup a portion of its equity. The 285,000-square-foot center was 95 percent occupied at the time of financing. Tenants include King Soopers, Ross Dress for Less, Old Navy and Michaels. Talonvest Capital Inc., a boutique self-storage and commercial real estate adviser, arranged a $9.5 million nonrecourse, long-term loan to refinance an Evergreen self storage facility. The 10-year fixed-rate loan with 10 years of interest-only payments was funded to Mountain Pacific Properties Inc. The loan refinanced the 109,500-sf facility at 29309 Industrial Way, at the intersection of Interstate 70 and state Highway 74. A multinational investment bank funded the loan to Mountain Pacific, which has owned the site for more than 10 years. In 2015, it purchased and developed the lot next to the existing facility and expanded the operation by adding two new buildings with 40,000 sf of drive-up, climate- and nonclimate-controlled units. The property now comprises 466 climate-controlled units, 165 nonclimate-controlled units, 159 drive-up units and six industrial spaces. “With so much uncertainty about rising interest rates, fixing my rate under 5 percent for the next 10 years eliminated interest rate risk while enhancing my cash flow. Talonvest’s ability to deliver interest-only loan payments for all 10 years made the new loan that much better,” said Daryl Flaming, president of Mountain Pacific. The Talonvest team responsible for this assignment included Eric Snyder, Erich Pryor, Jim Davies and Terra Hendrich. Waterstone Defeasance recently closed on the defeasance of six commercial mortgage backed securities loans for 19 properties totaling $144 million. The loans were secured by a portfolio consisting of multifamily properties located in Colorado, Nevada and New Mexico. Waterstone guided the owners through the defeasance process coinciding with the owners’ sale of four of the properties and the refinancing of the loans for the remaining two properties. Additional loan and property details were not disclosed. Holliday Fenoglio Fowler LP arranged $67 million in post-acquisition financing for a fully leased four-building Class A industrial portfolio in Charlotte, North Carolina; Memphis, Tennessee; and Orlando, Florida. The HFF debt placement team representing the borrower included Director Kristian Lichtenfels, Senior Managing Director Eric Tupler, Senior Director Cory Fowler and Managing Director Rebecca VanReken. The HFF team worked on behalf of Pauls Corp.and the borrower, Dream Industrial US Holdings Inc., to place the nine-year, 3.96 percent, fixed-rate loan with an insurance company. The borrower purchased the assets in December and January. The portfolio comprises four Class A bulk warehouse buildings, two of which are single-tenant and two are multitenant. The portfolio is 100 percent leased to a total of six tenants and features clear heights ranging from 25 to 32 feet, a total of 247 dock-high doors, 18 drive-in doors and approximately 4 percent office finish.