Colorado Real Estate Journal - March 16, 2016
Financier Jordan Ray knows Aspen, even though he is based in New York City. Parents of friends used to take him to Aspen to ski when he was in high school and it remains one of his favorite places in the country to hit the slopes. “I’m going to Aspen next week to ski,” Ray, the managing director of the debt and equity finance group at Mission Capital, recently told the Colorado Real Estate Journal, in a phone interview from his office in New York. Ray also has a professional interest in Aspen. He was recently part of the Mission Capital team, which also included Ari Hirt, Steven Buchwald and Jamie Matheny, that made a $10.23 million loan for the 45-key Hotel Aspen, a boutique hotel at 110 W. Main St., at the entrance of Aspen’s downtown. The hotel is owned by Haymax Capital LLC, headed by brothers Michael and Aaron Brown, according to public records. “The quick story is that we have known the sponsors, who own this asset, for a while,” Ray said. Haymax also owns another hotel across the street that it had attempted to sell, he noted. It was marketed by another broker but they weren’t able to sell it for the price they wanted, he said. “They hired Mission to refinance this asset,” which had debt coming due, he said. ”We were able to produce a number of competitive offers from debt funds and banks,” Ray added. “Ultimately, we arranged a great nonrecourse, 10-year fixed-rate pre-payable loan from a regional bank at a very low rate, retiring the property’s existing loan and returning capital to the sponsor.” The loan carries an interest rate in the low 4 percent range, he said. Plus, it is very flexible. “It is just great debt,” Ray said. “In the future, if they want to sell the asset and prepay the loan,” they can do so without a prepayment penalty, he said. The loan was a bit of a challenge because the borrowers wanted a nonrecourse loan, with a low interest rate and no prepayment penalty, he said. “It was a bit of a challenging transaction, but we like challenges. And we like Aspen,” Ray said. Mission delivered on everything the borrower wanted. “It is a fantastic deal,” Ray said. He said that Mission received nine quotes from groups interested in making the loan. The loan was on the small side for Mission, which since it was founded in 2002 has arranged and structured more than $5 billion in real estate loans on behalf of owners, investors and developers. “I would say our average piece of financing is in the $30 million” range, Ray said. “We do a lot of transactions, and while $10 million is on the small side, we also do transactions in the $100 million range,” he said. He said most of their business is based on relationships. “We are based in New York, but more than half our business is from outside of New York, all around the country,” Ray said. In fact, a lot of their recent business has been for apartments in Los Angeles and Las Vegas, according to Mission’s website. Mission hopes to do more deals in Colorado’s mountain resorts, as well as in the Denver area, Ray said. “Absolutely,” Ray said. “We love the mountains and love the Colorado market. We see more opportunity in the West than we do in the East. We are even considering opening an office in Denver to better cover that Rocky Mountain region. We love Denver and we love Salt Lake City.” When he was younger, he had never stayed at Hotel Aspen. However, he had stayed at the Molly Gibson Lodge across the street, which is also owned by Haymax. “They own clean and nice hotels that are at a lower price point than the Little Nell.” Other News Greg Benjamin, senior vice president, and Jeff DeHarty, associate producer, in the Denver office of NorthMarq Capital arranged $23 million in permanent financing for the Park Place Olde Towne Apartments at 5743 Teller St. in Arvada. The five-story building has 153 units. Benjamin and DeHarty arranged the financing through their long-term correspondent relationship with a major Midwestern life insurance company. Catherine Murphy of Chase recently arranged about $12.5 million in financing in eight separate apartment transactions. All of the loans are amortized over 30 years. In the largest single transaction, she arranged a $3 million recourse loan with 1050 Ogden LLC for the refinance a 23-unit apartment complex at 1050 Ogden St. in Denver. The five year, fixed-rate loan has a 3.8 percent interest rate. Other loans by Murphy include: •A $2.75 million recourse loan with Charles & Carol Semple Living Trust for the refinance of a 36-unit apartment community at 1424 Pearl St, in Denver. The seven-year, fixed-rate loan has an interest rate of 3.8 percent; •A $1.6 million nonrecourse loan with Clay Street Apartments LLC for the purchase of a 20-unit apartment complex at 4353-4373 Clay St. in Denver. The seven-year, fixed-rate loan has an interest rate of 4.13 percent; •A $1.2 million recourse loan with Ash and Bellaire LLC for the purchase of a 16-unit apartment complex at 1194-1196 Ash St. and 1181 and 1185 Bellaire St. in Denver. The adjustable loan follows the 12-month Treasury average index with a starting rate of 2.89 percent; •A $1.16 million nonrecourse loan with PJM Investments LLLP for the refinance of a 12-unit apartment complex at 3460 Madison Ave. in Boulder. The seven year, fixed-rate loan has an interest rate of 3.95 percent; •A $1.08 million recourse loan with LAJ & Associates LLC for the refinance of a 22-unit apartment complex at 172 W. Ida Ave. in Littleton. The five-year, fixed-rate loan has an interest rate of 3.9 percent; •A $887,500 recourse loan with Carol E. Quinn for the purchase of an 11-unit apartment complex at 2412 S. York St. in Denver. The five-year, fixed-rate loan has an interest rate of 3.45 percent; and •A $850,000 recourse loan with Carol E. Quinn for the refinance of a 12-unit apartment complex at 1152 York St. in Denver. The five-year, fixed-rate loan has an interest rate of 3.68 percent. Brandon Rogers and Amy Gibson of Terrix Financial recently arranged $2.59 million in acquisition financing for a recently constructed, 8,442-square-foot retail center in Colorado Springs. The center is 100 percent occupied by five tenants. The 10-year loan carries a 3.75 percent interest rate for the first three years, 4.5 percent for years four through seven and 4.75 percent for years eight through 10. It is amortized over 25 years. Brandon Rogers and Jay Richert of Terrix Financial arranged a $1.6 million nonrecourse loan for the acquisition of an 18-unit apartment building in Denver. The four-story apartment building was built in 1911. The five-year, 65 percent loan-to-value financing is interest only for the first 18 months. A regional bank made the loan. The lender also allowed the seller to carry a second position in the transaction. The lender closed the loan in about 40 days. Josh Simon and Eric Tupler of the Denver office of Holliday Fenoglio Fowler LP represented Advenir in acquisition financing for a 480-unit apartment community in Houston. The amount of the loan was not disclosed. The seven-year, floating-rate loan has a 2.82 percent interest rate. The securitized loan will be serviced by HFF through its Freddie Mac Program Plus Seller/Servicer program. Cortney Cole of HFF’s Houston office also was involved in the transaction. Brandon Rogers and Amy Gibson of Terrix Financial arranged a $1.88 million cash-out refinance for a 19,440-sf industrial building in Nevada.