- Cap Hill apartments sold for $11.5M
After just a year and half, a developer has sold the building he designed and built.
Chris Fulenwider last week sold a year-old Cap Hill apartment building at Emerson Street and 8th Avenue.
Illinois-based Inland Real Estate Group paid $11.5 million for The Emerson Lofts apartments, a 42-unit apartment building.
FarrellRES broker Frank Farrell and Berkadia broker John Laratta handled the deal on behalf of seller CF Studio.
"Emerson Lofts is located in the hottest submarket in Denver - there is no better apartment market for investment," Farrell said. "It's popular with renters because it's close to downtown. Whether you look at downtown as a place for nightlife, entertainment or your job, it's very convenient."
Fulenwider - who is also the building’s architect - said he had been working on the project for about two years before opening it to its first tenants in July 2013.
The three-story building has 31 one-bedroom apartments, 10 two-bedrooms and a single three-bedroom unit. Most of the building's tenants are young professionals, Fulenwider said, and it’s fully leased at about $2.60 per square foot.
Those lease rates overshot Fulenwider's own estimates for the project. His initial plan was to keep Emerson Lofts as a long-term investment, but he listed it last summer to capitalize on a hot apartment sales market. The final sales price came to just less than $274,000 per unit.
"The market said the time was right," he said.
Emerson Lofts makes at least three Denver-area acquisitions for Inland over the past year. Farrell said the company popped on his radar after going on a $50 million shopping spree just before Emerson Lofts hit the market.
Last April, Inland paid $43.5 million for a 263-unit Aurora apartment complex. And In June the company bought the Waneka Marketplace shopping center in Boulder for almost $10 million.
Inland representatives did not return phone calls seeking comment on the Emerson Lofts acquisition by press time. [Business Den]
- North County apartments sell for $6 million
A North County apartment complex has changed hands for nearly $6 million.
Circusdome LLC sold the Brighton Apartments, which counts 201 units at 2745 Rottingdean Drive, to SM-T.E.H. Realty 2 LLC. The deal closed in January.
SM-T.E.H. Realty 2 LLC was organized in September by Wyomissing, Pennsylvania, lawyer Kelsey Frankowski. Circusdome LLC was organized by Greg Zes of Chesterfield, according to records kept by the Missouri Secretary of State's office.
The complex, built in 1973, features 96 one-bedroom units and 105 two-bedroom units.
Andrea Kendrick of Berkadia Real Estate Advisors LLC negotiated the transaction. [St. Louis Business Journal]
- Berkadia Lists Villa Las Brisas in La Puente, CA for $20M - Bid Deadline: 3/12
Berkadia is pleased to announce the exclusive listing of Villa Las Brisas, located at 500-560 Leverett & 500-558 Dora Guzman Avenue in La Puente, CA. The asking price for the 104-unit apartment community is $20,000,000. The seller has engaged Alex Mogharebi and Otto Ozen of Berkadia's Ontario office to market the property. For additional information on the property, please visit the [Dedicated Property Website.]
- Berkadia Provides Financing, Negotiates $40M Sale
Portland, Ore.—Berkadia announced the financing and sale of The Union and sale of The Commons at Pilot Butte, both located in Oregon. The seller for The Union was project^ and the buyer was Horizon Realty Advisors. Sellers for The Commons at Pilot Butte included several private trusts and Evergreen Housing Development Group was the buyer.
Senior Vice President Jeff Stuart of Berkadia's Seattle office arranged a $12.4 million acquisition loan for The Union, a student housing community located at 2750 NW Harrison Boulevard in Corvallis, Ore. Stuart secured the seven-year, fixed-rate, interest-only loan through Berkadia's Freddie Mac Program. National Director of Student Housing and Partner Kevin Larimer, Partner Phil Oester and Vice President Joe Nydahl of Berkadia's Portland office negotiated the sale of the property, which sold for $19.1 million on Jan. 9, 2015. The sale price reflects a per-unit price of $280,882 or $301 per square foot.
Oester and Nydahl also negotiated the sale of The Commons at Pilot Butte, a multifamily property built in 2004, which sold for $20.9 million on Jan. 8, 2015. The sale price reflects a per-unit price of $102,328 or $111 per square foot. [Multi-Housing News]
- Vista Springs in Moreno Valley, CA Marketed by Berkadia
Berkadia is pleased to announce the exclusive listing of Vista Springs, a 212-unit apartment community, located at 21550 Box Springs Road in Moreno Valley, CA. The seller has engaged Alex Mogharebi and Otto Ozen of Berkadia's Ontario office to market the property. For additional information on the property, please visit the [Dedicated Property Website.]
- Berkadia Lists Ashton of Richmond Hill in Georgia for $14.79M
Berkadia is pleased to announce the exclusive listing of Ashton of Richmond Hill, located at 505 Harris Trail in Richmond Hill, GA. The asking price for the 232-unit apartment community is $14,790,000. The seller has engaged Andrew Mays and Paul Vetter of Berkadia's Atlanta office, Mark Boyce of Berkadia's South Carolina office and Cole Whitaker of Berkadia's Orlando office to market the property. For additional information on the property, please visit the [Dedicated Property Website.]
- Unsold Artesia condo units sell in bulk
Fifty-three units in the 81-unit Artesia Escondido at 101 S. Spruce St., Escondido 92025, have been sold for $9.01 million.
The buyer was Artesia Escondido LLC of San Diego. SENTRE Artesia LLC is the manager of the seller, and Douglas M. Arthur is the manager of SENTRE Artesia.
Each of the units was financed individually with a $76,500 loan from First Republic Bank (NYSE: FRC). The bank also provided construction financing of $901,000.
The sellers of the property (assessor's parcels between 232-220-24-03 and -78) were Escondido Condo Holdings LLC and DR Condo Holdings LLC of Logan, Utah. Randy M. Hansen is the manager of both.
Dave Andrews, vice president of the San Diego office of Berkadia Real Estate Advisors, negotiated the transaction.
The sales price reflects a per-unit price of $170,000, or $195 per square foot. The property was 98 percent occupied at the time of the sale.
Built in 1989, Artesia Escondido is a low-density, garden-style community that features two- and three-bedroom floor plans.
Each unit features fully equipped kitchens, washer and dryers, balconies or patios, and private garages.
Community amenities include a swimming pool with cabanas, fitness center, barbecue areas and clubhouse.
Vacancy in the San Diego metro reached 3.7 percent by the end of 2014, dropping 50 basis points from the start of the year.
After increasing rents 3.3 percent in 2013, operators advanced average asking rent 4.3 percent since January of 2014 to $1,673 per month in December.
Berkadia, a joint venture of Berkshire Hathaway (NYSE: BRK.B) and Leucadia National Corp. (NYSE: LUK), is a commercial real estate company providing capital solutions and investment sales advisory and research services for multifamily and commercial properties.
Berkadia also provides interim and short-term financing through its Proprietary Bridge Lending Program. Commercial mortgage loan banking and servicing businesses are conducted by Berkadia Commercial Mortgage LLC and Berkadia Commercial Mortgage Inc. Both firms also conduct investment sales and real estate brokerage businesses. [San Diego Daily Transcript]
- Apartment living growing
Apartment living is poised to grow as a lifestyle instead of being just a temporary living situation, a Fresno apartment expert said.
Seniors are looking to downsize and want to be in an urban setting where they can live, work and play, said Robin Kane, senior vice president at Berkadia Real Estate Advisors in Fresno. Meanwhile, millennials - young professionals between 20 and 35 years old - have roadblocks to homeownership.
Kane spoke to students and real estate professionals at Fresno State's Gazarian Real Estate Center Speaker Series on Wednesday about apartments and whether renting is the new American dream.
A survey of renters conducted by online housing company Trulia showed that 70% of renters still view homeownership as the American dream, Kane said. But today's potential homebuyers aren't moving quickly to make happen.
Millennials are mobile, delaying marriage and children, and have more student and credit card debt than generations before them, Kane said.
"They're more conservative," he added. "They saw what happened to us, their parents, with (the real estate crash). So, when it comes to housing, their choice isn't to rush into the homebuying cycle like we did."
Then there's the money thing.
Affordability diminishes as home prices increase. Tightened lending restrictions make it harder to get approved for a mortgage loan. And today's potential homebuyers are dealing with stagnant wage growth.
"These are all impediments for renters to become homeowners," Kane said.
But on a positive note, urban development in major cities across the country is reviving city centers with mixed-use developments that include apartments on top of ground level retail spaces.
That puts both seniors and millennials closer to city services, shops and activities, Kane said.
"They want that urban lifestyle," Kane said. "It's different than what we remember." [The Fresno Bee]
- Berkadia's Alabama office adds multifamily expert
Berkadia's Alabama office has added David D. Wilson, who will serve as senior investment advisor to the Arizona firm's Birmingham office.
Wilson has more than 25 years experience in commercial real estate, and he has specialized in multifamily development and transactions for over 20 years.
"We're excited to have David join our team," said Berkadia Partner David Oakley, in a statement this week. "We're in a fast-moving apartment investment market and adding his talents and dedication to our group will create a substantial impact for our clients in the management of their investment portfolios."
Wilson has owned a commercial real estate appraisal, research and consulting company in Huntsville, and the company has focused exclusively on multifamily for the past eight years.
Wilson has provided brokerage and advisory services to buyers and sellers of multifamily developments in Alabama and Tennessee over the past decade.
Wilson is a graduate of the University of Southern Mississippi and is a 12-year member of the Apartment Association of North Alabama. [Birmingham Business Journal]
- LSU-area apartment complex sells for $32.5M to Illinois firm
The Ohio developer of University Edge apartments has sold the complex at 650 W. McKinley St. for $32.5 million to an Illinois firm that specializes in student housing. Hallmark Student Housing Baton Rouge sold the two-year-old complex—which includes 474 beds in 158 units—to Scion BR Apartments, which owns and operates some 16,250 beds of university housing near 24 college campuses across the country.
"LSU is a market we really wanted to be in, and we actually hope to expand our presence there," says Eric Bronstein, principal and executive vice president of Scion. "It is a good asset property in a good location in what we see as a strong market."
Like many newer student housing complexes, University Edge counts beds rather than individual units. That's because most of its apartments are designed to house several students, who each have a private bedroom and bath but share common areas. The model is appealing, particularly with younger students, because it is more economical and enables several students to live in close proximity.
Bronstein says Scion has enjoyed plenty of success managing complexes under the model and is bullish on the Old South Baton Rouge neighborhood that is home to University Edge because of its proximity both to LSU and the planned Water Campus.
"We feel we'll be sandwiched between two big pieces of land that are run by the university, and it's walking distance to the main campus," he says. "We feel over the coming years it will improve even more as a satellite."
Gregg Cordaro with the Berkadia Louisiana office represented the seller in the transaction. At $221,088 per unit, or $68,856 per bed, he says the sale marks the highest price-per-unit paid for a student housing community in Louisiana. [Greater Baton Rouge Business Report]
- Crossing at Daybreak Listed by Berkadia, Tours: February 10th, 11th, 18th and 19th
Berkadia is pleased to announce the exclusive listing of Crossing at Daybreak, a 315-unit apartment community, located at 4950 West Frog's Leap Drive in South Jordan, UT. The seller has engaged James Wadsworth and Greg Barratt of Berkadia's Salt Lake City office to market the property. For additional information on the property, please visit the [Dedicated Property Website.]
- RK Properties Adds to Multi-Family Holdings...Drops $23.25 Million for 160 Units
Cave Creek - A company formed by RK Properties in Long Beach, Calif. (William Rance King, Jr., mgr.) paid $23.25 million ($145,313 per unit) to buy the 160-unit Azure Creek at Tatum Ranch apartments at 29862 N. Tatum Boulevard in Phoenix. The seller was Sunstone Azure LP, a limited partnership formed by Sunstone Realty Advisors in Vancouver, British Columbia, Canada (Steve Evans, principal). The deal was brokered through Mark Forrester, Ric Holway and Dan Cheyne of Berkadia in Phoenix. Maricopa County records show RK Azure Creek LLC (RK Properties entity) acquired the property with a $13.25 million loan from BB&T Real Estate Funding LLC, a subsidiary of Grandbridge Real Estate Capital LLC in Chicago, Ill. At year-end 2010, the Sunstone Realty Advisors company paid $17.5 million ($109,375 per unit) to acquire Azure Creek at Tatum Ranch. The complex was built in 2001. The privately-held RK Properties has been an investor in the Valley for 10 years and has completed $500 + million in multi-family transactions in the U.S. since 1976. The company owns 1,930 apartments in the Phoenix area and also has multi-family properties in California, Colorado, Utah, Nevada and Florida. In its last Valley apartment investment reported by BREW in June 2014, RK Properties paid $21.2 million ($50,476 per unit) to acquire the 420-unit Northern Greens apartments at 8150 N. 61st Avenue in Glendale. RK Properties is interested in purchasing additional apartment projects in the Phoenix area. Find out more from King at (800) 677-7333. Talk to Evans at (604) 681-5959. Call the Berkadia agents at (602) 955-1122. [Brew]
- Berkadia Showcases Elan at Desert Ridge in Phoenix, AZ
Berkadia is pleased to announce the exclusive listing of Elan at Desert Ridge, a 370-unit apartment community, located at 21155 North 56th Street in Phoenix, AZ. The seller has engaged Mark Forrester, Ric Holway and Dan Cheyne of Berkadia's Phoenix office to market the property. For additional information on the property, please visit the [Dedicated Property Website.]
- Glendora Park Place in Glendora, CA Listed by Berkadia for $14.5M
Berkadia is pleased to announce the exclusive listing of Glendora Park Place, located at 641 West Route 66 in Glendora, CA. The asking price for the 50-unit apartment community is $14,500,000. The seller has engaged Peter M. Hauser of Berkadia's Newport Beach office to market the property. For additional information on the property, please visit the [Dedicated Property Website.]
- Mogharebi of Berkadia Presents Ariana at El Paseo in Palm Desert, CA for $7.65M
Berkadia is pleased to announce the exclusive listing of Ariana at El Paseo, located at 45278 Deep Canyon Road in Palm Desert, CA. The asking price for the 63-unit apartment community is $7,650,000. The seller has engaged Alex Mogharebi and Otto Ozen of Berkadia's Ontario office to market the property. For additional information on the property, please visit the [Dedicated Property Website.]
- Berkadia CEO Sees U.S. Property as Hot Space Amid Global Shocks
Justin Wheeler, who was named chief executive officer last week of the commercial-mortgage business owned by Berkshire Hathaway Inc. (BRK/A) and Leucadia National Corp. (LUK), said global investors are increasingly betting on U.S. property.
"People just want to pump dollars into the U.S." amid volatility in other markets, he said in a phone interview Tuesday afternoon New York time. Commercial real estate is a "hot space right now."
Wheeler's Berkadia Commercial Mortgage LLC originates and brokers loans, some of which are sold to U.S. government agencies. The company is also among the largest servicers of commercial real estate debt. Berkshire and Leucadia formed the company in 2009 after buying a business from bankrupt Capmark Financial Group Inc.
U.S. commercial property values surpassed the November 2007 peak by 2.4 percent, as measured by the Moody's/RCA Commercial Property Price Index. Prices in major markets, which include cities like New York and San Francisco, have exceeded prior records by about 16 percent, Moody's said this month in a report.
Markets have been rattled by plunging oil prices and central-bank moves like last week's decision by the Swiss National Bank to abolish a currency ceiling. That's driven investors to the U.S. even as its economy is still rebounding.
Chinese insurance companies are flooding into the global market for prime commercial real estate, helping to drive up property values. And Blackstone Group LP agreed to buy 36 apartment properties across the country for about $1.7 billion, two people with knowledge of the deal said this week.
The U.S. is the "tallest building in Idaho," Wheeler said, referring to one of the least-densely populated states.
Berkadia has expanded in recent years through acquisitions. In May, it bought Keystone Commercial Capital, a mortgage-banking company. In 2013, it purchased Hendricks & Partners, a firm that advises clients on multifamily real estate.
Wheeler, who used to work on mergers and acquisitions for Leucadia and has been acting CEO of Berkadia since April, said there will be more chances for Berkadia to buy businesses. The company's owners have the resources and long-term focus to do bigger deals when opportunities arise, he said. Berkshire is run by billionaire Warren Buffett and Leucadia by CEO Richard Handler.
"It's rare to be part of an organization that thinks in decades, not months and quarters," Wheeler said. "That's a real competitive advantage for us." [Bloomberg]
- Multifamily market to stay hot in 2015
Birmingham's red hot multifamily market in 2014 has reshaped the dynamic of downtown.
Although there is a lot of pint-up demand for apartment units in the Magic City, that isn't the only thing driving action in the sector.
Berkadia recently released its 2015 forecast for the nation, which looks at 60 metros, including Birmingham.
Overall, job growth across the country has driven urban apartment developments in metros like Dallas and Nashville.
While CBD job growth in Birmingham has not been as strong as other metros, investors see the Magic City as a place that provides solid vintage product, as well opportunities for new developments.
"It looks very positive," said David Oakley, partner at Birmingham's Berkadia office. "We're very excited about it. People are proceeding cautiously, but optimistically."
In 2014, Birmingham saw a small population increase of 0.6 percent, while employment grew at 0.5 percent. The median home price grew 1.2 percent to $166,800, while the median household income grew by the same percentage to $48,200.
Rising incomes facilitated rental demand, which led to 1,200 units being absorbed during 2014, compared to the 10-year average of 250 per year, the report said.
Developers delivered 1,100 units in the metro area, the highest number since 2005.
"I see it continuing," Oakley said, noting that developments like the 300-plus unit Highland apartment tower is seeing some demolition work on the site.
Also, Iron City Lofts developer KRE Development Holdings plans to start construction on the 67-unit development by Pepper Place this month.
Bomosada Group said it will break ground on a 300-plus unit development in Lakeview in late May or early June.
The development that will bring Publix, Starbucks and other retailers to 20th Street South and Third Avenue South also involves over 100 apartment units.
"We're seeing some newer deals come on online that are seeing some extremely strong demand, which is surprising a lot of people," Oakley said.
Oakley said he expects older product will continue to move in the area after over $150 million in apartments were sold between November 2014 and this month.
As far as new areas to look for for new development, Oakley said to keep an eye out for Irondale.
"The real area that I think is going to sneak up on everyone and surprise everyone is Irondale-east," Oakley said, noting recent traffic producers like Grant's Mill and Church of the Highlands as potential catalysts for development. "I think that market will be a point of interest in the next 24 months. It's prime for new development."
As young professionals continue to move to Birmingham because of downtown employers like UAB, Oakley said to expect night life and entertainment options to keep growing.
If that happens, there should be no slacking off in apartment developments near the central business district. [Birmingham Business Journal]
- Unpriced Two-Property Portfolio in Newport News, VA Listed by Berkadia
Berkadia is pleased to announce the exclusive listing of Hanover & Kopenhaven, a two-property, 113-unit multifamily portfolio, located in Newport News, VA. The seller has engaged David Hudgins and Alan Meetze of Berkadia's Newport News office to market the portfolio. For additional information, please visit the [Dedicated Property Website.]
- North County apartment complex sells for $6.1 million
The Springwood apartment complex in Bel-Ridge has sold to a Reading, Pennsylvania, corporation for $6.1 million.
Taterville LLC, organized by Gregory Zes of Chesterfield, on Dec. 30 sold the 272-unit complex to SM-T.E.H. Realty 1 LLC, its first purchase in the St. Louis region.
The complex, at 4212 Springdale Ave., about one mile from the University of Missouri - St. Louis, was built in 1967, and features one- and two-bedroom floor plans. Ken Aston and Andrea Kendrick of Berkadia Real Estate Advisors negotiated the transaction. [St. Louis Business Journal]
- Berkadia Markets Four-Property Portfolio in Missouri for $8.28M
Berkadia is pleased to announce the exclusive listing of the Southeast Missouri Portfolio, a four-property, 184-unit multifamily portfolio, located in Park Hills, Perryville and Farmington, MO. The seller has engaged Andrea Kendrick and Ken Aston of Berkadia's St. Louis office to market the portfolio. For additional information, please visit the [Dedicated Property Website.]
- Acting CEO Wheeler Takes Helm at Berkadia
HORSHAM, PA-Justin Wheeler, who has held the title of acting CEO at Berkadia Commercial Mortgage since this past spring, now gets the job on a permanent basis. Currently COO at Leucadia National Corp., which owns Berkadia in a 50/50 joint venture with Berkshire Hathaway, Wheeler stepped in as interim CEO for Berkadia when Hugh Frater relinquished the position to become chairman.
With his interim CEO duties now permanent, Wheeler will be stepping down from his position as Leucadia's COO, which he has maintained while serving as acting CEO for the Berkadia JV. He joined Leucadia as a VP in 2006, and previously served as president and CEO of American Investment Bank, a Leucadia subsidiary.
"As 50% owner of Berkadia, we will work closely with Justin to create further value at the company," Richard B. Handler and Brian P. Friedman, the respective and president of Leucadia. "We are sincerely grateful to Justin for all he has done for Leucadia, and we look forward to our continuing partnership with Justin and the outstanding team at Berkadia."
For his part, Wheeler says, "Over the previous 10 months, Berkadia has significantly strengthened its market position, brand and overall momentum." He looks forward "to working with our exceptional clients, employees and shareholders to further accelerate growth and leverage our unique platform." [GlobeSt]
- El Dorado Villas in Sherman Oaks, CA Listed by Berkadia for $21.5M
Berkadia is pleased to announce the exclusive listing of El Dorado Villas, located at 4510 Murietta Avenue in Sherman Oaks, CA. The asking price for the 33-unit apartment community is $21,500,000. The seller has engaged Brent Sprenkle of Berkadia's West Los Angeles office to market the property. For additional information on the property, please visit the [Dedicated Property Website.]
- Berkadia Presents Two-Property Portfolio in El Paso, TX for $11.35M
Berkadia is pleased to announce the exclusive listing of the Shadow Mountain Portfolio, a two-property, 236-unit multifamily portfolio, located in El Paso, TX. The seller has engaged Winston Black of Berkadia's Colorado Springs office to market the portfolio. For additional information, please visit the [Dedicated Property Website.]
- This Week's Chicago Deal Sheet
Berkadia SVP Ralph DePasquale completed the $26.3M sale (nearly $90k/unit) of the 300-unit Forest Cove Apartments, 1706 Forest Cove Dr in Mount Prospect. Berkadia's Matt Ewig and Jeff Robbins refinanced the 97% occupied asset in 2013 for seller Forest Cove Venture, allowing the new buyer to assume the existing debt. The buyer, TLC Ventures, headed by Stuart Handler, was attracted to the property for its renovation potential and has upgrades planned. [Real Estate Bisnow]
- Boulders on the River in Eugene, OR Listed by Berkadia's Portland Office
Berkadia is pleased to announce the exclusive listing of Boulders on the River, a 249-unit apartment community, located at 655 Goodpasture Island Road in Eugene, OR The seller has engaged Phil Oester and Joe Nydahl of Berkadia's Portland office to market the property. For additional information on the property, please visit the [Dedicated Property Website.]
- Firm brokers $27M sale of Smyrna Mission Galleria Apartments
Berkadia Real Estate Advisors, one of the nation's largest and most active multifamily investment banking and research companies, recently brokered a $27 million sale of the 416-unit Mission Galleria apartment community at 5000 South Lincoln Trace Ave. NE in Smyrna.
Andrew Mays and Paul Vetter, senior vice presidents at Berkadia's Atlanta office, represented the buyer RADCO Investments LLC on the deal and worked with David Oakley, partner in Berkadia's Birmingham office, who represented the seller Mission Galleria LLC.
"RADCO recognized in Mission Galleria an excellent value-add opportunity buoyed by the adjacent development of SunTrust Park, and moved expeditiously to get this done," said Mays.
"A deal of this size and complexity would have never come to fruition without the collaboration of our Southeastern offices using their creativity and leveraging existing relationships within the region," said Brent Long, president at Berkadia’s Phoenix headquarters.
Mission Galleria is within walking distance and adjacent to SunTrust Park, the future home of the Atlanta Braves, which is slated to open in 2017 at an estimated cost of more than $600 million, seating more than 40,000.
"Major developments like the Braves' SunTrust Park in Cobb County bring additional development opportunities creating a domino effect," said Vetter.
"Buyer and seller were exceptional to deal with and we were excited to bring the two relationships together for a successful transaction, the first of many our Atlanta team will deliver and I'm thrilled to be a part of their positive momentum," said Oakley.
Built in 1975, and situated on more than 25 acres, Mission Galleria was 85-percent leased at the time of the sale. [Marietta Daily Journal]
- ColRich Adds to Valley Holdings- Picks Up 332 Apartments in $31 Million Deal
Scottsdale - A joint venture formed by ColRich in San Diego, Calif. (Danny Gabriel, principal) and Harbert Management Corp. in Birmingham, Ala. (Raymond Harbert, principal) paid $31 million ($93,373 per unit) buy The Cortesian, a 332-unit apartment community located at 7749 E. Camelback Road in Scottsdale. The seller was Camelback Cortesian LLC, a company formed by El Dorado Holdings Inc. in Phoenix (Mike Ingram, chairman). The deal was negotiated by Mark Forrester and Ric Holway of Berkadia in Phoenix. Maricopa County records show CH Cortesian Communities LLC (ColRich/Harbert venture) acquired the apartment property with a $7.79 + million down payment, by assuming a $12.657 million Freddie Mac loan owed to the registered holders of Deutsche Mortgage & Asset Receiving Corp. Multifamily Mortgage Pass-Through Certificates Series 2011-K11 and with $10.55 million in supplemental financing issued through Centerline Mortgage Partners Inc. The escrow was handled by Kristina Gooding of Thomas Title & Escrow LLC in Scottsdale. In April 2012, BREW reported the El Dorado Holdings entity paying $25.85 million ($77,861 per unit) to buy The Cortesian. The complex was developed in 1971. ColRich and Harbert Capital, both privately-held companies, have been active buying and selling multi-family properties in the Valley. At year-end 2014, BREW reported a company formed by ColRich and Harbert selling the 124-unit Solaire apartments at 801 E. McKellips Road in Tempe. The buyer in that $12.4 million sale ($100,000 per unit) was PAM Real Estate Group in Kirkland, Wash. (Michael Thayer, principal). Learn more from Gabriel at (858) 490-2303. Jon-Paul Momsen is the contact for Harbert Management . . . call him at (415) 442-8380. Jim Kenny, pres. of El Dorado Holdings, is at (602) 955-2424. Reach Forrester and Holway at (602) 955-1122. [Brew]
- Berkadia Markets Student Housing Property Near West Virginia University
Berkadia is pleased to announce the exclusive listing of The Lofts, a 218-unit student housing community, located at 5000 Station Street in Morgantown, WV. The seller has engaged Kevin Larimer and Michael Tassoni of Berkadia's Michigan office to market the property. For additional information on the property, please visit the [Dedicated Property Website.]
- Peppertree in Cypress, CA Listed by Berkadia's Newport Beach Office
Berkadia is pleased to announce the exclusive listing of Peppertree, a 136-unit apartment community, located at 9091 Holder Street in Cypress, CA. The seller has engaged Shane Shafer of Berkadia's Newport Beach office to market the property. For additional information on the property, please visit the [Dedicated Property Website.]
- Berkadia Lists Sandstones Apartment Homes in Pensacola, FL
Berkadia is pleased to announce the exclusive listing of Sandstones Apartment Homes, a 172-unit apartment community, located at 190 North Old Corry Field Road in Pensacola, FL. The seller has engaged Cole Whitaker and Hal Warren of Berkadia's Orlando office, Jason Stanton of Berkadia's Tampa office and David Oakley and David Etchison of Berkadia's Alabama office to market the property. For additional information on the property, please visit the [Dedicated Property Website.]
- Oregon Investor Jumps Back In The Pool...Buys 251 Apartments In Second Valley Deal
Avondale - After expanding into Arizona and making its first Valley real estate investment in August, Umbrella Properties Inc. of Coburg, Ore. (Ryan Thompson, principal) took just four months to make its second apartment property acquisition in the Phoenix market. Club at Coldwater Springs SIG LLC (Umbrella Properties entity) paid $24 million ($95,618 per unit) to buy The Club at Coldwater Springs, a 251-unit apartment project at 105 N. Links Drive in Avondale. The seller was PM Club at Coldwater Springs Avondale LLC, a company formed by PEM Investments Real Estate Group in Scottsdale (Paul Mashni, principal). The buyer was represented by Mark Forrester, Ric Holway and Dan Cheyne of Berkadia in Phoenix. The seller was represented by Steve Nicoluzakis and Dave Fogler of Cassidy Turley in Phoenix. Records show the buyer acquired the asset with a $16.1 million Fannie Mae loan issued by Greystone Servicing Corp. Inc. In June 2007, BREW reported PEM Investments paying $33.6 million ($133,865 per unit) to acquire the Avondale apartments. The complex was developed in 2005. In August, BREW reported Umbrella Properties paying $19.5 million ($93,750 per unit) to purchase the 208-unit Desert Sage apartments at 1737 N. Central Avenue in Goodyear. PEM Investments was also the seller. Find out more from Thompson at (541) 484-6595. Call Mashni at (480) 422-6930. Reach the Berkadia agents at (602) 955-1122. Talk to the Cassidy Turley agents at (602) 954-9000. [Brew]
- Student Housing Property in Knoxville, TN Listed by Berkadia
Berkadia is pleased to announce the exclusive listing of Quarry Trail, a 252-unit student housing community, located at 3999 Highland Crest Way in Knoxville, TN, NM. The seller has engaged Kevin Larimer and Michael Tassoni of Berkadia's Michigan office and Royce Emerson of Berkadia's Alabama office to market the property. For additional information on the property, please visit the [Dedicated Property Website.]
- Koreatown Apartments Flipped, To Be 'Repositioned'
Apartment buildings in Koreatown continue to be a popular buy for investors. Murano Apartments, a 46-unit multifamily property at 342-50 S. Catalina St., was sold recently to Beverly Hills real estate company SM Management for $11.6 million, or about $252,000 a unit. The seller, San Mateo investment group TDA Inc., had purchased the building for $5.1 million in 2002, according to CoStar. The property was entirely occupied at the time of sale.
Asking rents for the building's 31 one-bedroom units and 15 two-bedroom units range from $1,123 a unit to $1,675.
Brent Sprenkle, a partner in the Westwood office for Berkadia, a joint venture of Berkshire Hathaway and Leucadia National Corp., represented both buyer and seller in the deal. He said SM was willing to pay a big price for the 25-year-old building because it is confident the property can be repositioned.
"They see really heavy demand for rentals and a constrained market, and they feel strongly that they can raise rents in that building significantly," he said. "They also own a lot of other assets in the area, so they were familiar with the market."
Multifamily vacancy in the Central Los Angeles submarket, where Koreatown falls, was 6.5 percent in the third quarter, up from 6 percent in the same period a year earlier, according to data provided by Berkadia. Still, rents have continued to climb, rising 6.9 percent year over year in the third quarter to $3,058 a month. [Los Angeles Business Journal]
- Austin broker handles $335M deal while battling cancer along the way
A team of brokers from the Austin offices of Berkadia recently closed a $335 million national apartment portfolio deal involving 5,704 units in six states.
George Deuillet, senior vice president of Berkadia in Austin, and Vice President Forrest Bass were selected by a court-appointed receiver to market the deal even though none of the properties are located here. The apartments are in Texas, Ohio, Louisiana, Kansas, Oklahoma and Tennessee.
The process of picking the best buyers - eventually Cortland Partners based in Atlanta - took several months and involved sorting through 85 offers, assisting the with possible financing and dealing with the always complex court process.
All of this was happening while Deuillet faced the toughest personal challenge - battling cancer.
"I'm doing fine. I'm on chemo right now and I seem to be responding well to the chemo," Deuillet said.
He credited Bass for keeping everything moving forward while he coped with the rigors of treatment and the accompanying fatigue.
Deuillet's previous relationship with the seller - Management Solutions Inc. - probably played a key role in securing the weighty assignment.
"I knew those folks from the late 1990s and I was involved with this from day one," Deuillet said.
The sale of the portfolio was ordered by the court after the U.S. Securities and Exchange Commission took control of MSI in late 2011.
The SEC accused the MSI founders and operators - Wendell A. Jacobson and his son Allen R. Jacobson of Utah - of violating securities laws and using their relationships with members of the Church of Jesus Christ of Latter-day Saints to commit fraud.
Ultimately after much publicity and rancor involving about 200 investors, the Jacobsons settled the case without admitting guilt, though they were each fined $150,000, according to an account in the Wall Street Journal.
Without elaborating on the specifics, Deuillet said he knew the Jacobsons well and was contacted by them when the issues with the SEC surfaced. Still, he said, the assignment to market the large portfolio was made by the court-appointed receiver John A. Beckstead of law firm Holland & Hart LLP based on Berkadia's merits. Deuillet and Bass won the nod over seven competing brokerage teams.
Formerly Hendricks-Berkadia, the multifamily-focused brokerage has been beefing up its presence in Austin. Handling a deal of this magnitude should help the company grow its book of business locally and regionally, Deuillet and Bass said.
The MSI transaction involved several Berkadia offices, including San Antonio; Dallas; Houston; Oklahoma City; Kansas City, Missouri; and Baton Rouge, Louisiana.
Though most of the deal has closed, some of the transactions will be completed by the end of the year.
"It's been a significant deal. I haven't had the privilege of doing something this big in my 22-year career," Deuillet said. "Sure, it looks good on my resume, but it looks even greater on Berkadia's resume." [Austin Business Journal]
- Major Piece of MSI Portfolio Closes at $239M
PHOENIX-A multi-region team effort went into the marketing of the MSI National Apartment Portfolio, with the $239-million sale having just closed on a major portion of the 5,380-unit portfolio, GlobeSt.com has learned exclusively. Locally based Berkadia was engaged to sell the portfolio in September 2013 by its court-appointed receiver, as GlobeSt.com first reported last year. It brought in about 85 letters of intent from qualified purchasers, although not all wanted to buy the MSI portfolio lock, stock and barrel.
For the buyer, Atlanta-based Cortland Partners, the decision to buy the entire portfolio was driven partly by its diversity, geographic and otherwise, and partly by the quality of some of the assets, particularly those in Texas and Ohio, Berkadia SVP George Deuillet tells GlobeSt.com. The Columbus, OH portion represented the single largest concentration in the portfolio with 2,146 units across eight properties; the sale of the eight those assets, which Deuillet describes as "all in the B-plus range with pretty significant upside," has closed at more than $111 million. The Texas assets spanned the Dallas, Houston and San Antonio markets, with 1,586 units across seven properties that comprised $99.4 million of the total.
"What Cortland felt was that in order to get control of those, they needed to take the smaller ones in Iowa and Kansas that were sort of lumped in," Deuillet says. While Cortland plans to spin off some of those smaller communities, the deal will do much to broaden its reach outside its Southeast home base.
From the standpoint of the seller, Cortland’s experience with managing apartment assets and the strength of its balance sheet were deciding factors. Furthermore, says Deuillet, the Berkadia team convinced receiver John A. Beckstead of law firm Holland & Hart LLP to sell the portfolio in its entirety, although the properties had been marketed as either a complete portfolio, three sub-portfolios or individual assets. "We told the receivers, 'You can't cherry-pick. You don't want to be stuck with the four 38-unit assets in Iowa.' "
Brent Long, president of Berkadia Investment Sales, says the portfolio is "certainly one of the largest listed and sold transactions across such a diverse array of markets." It came to market after the SEC filed a civil suit against Utah-based Management Solutions Inc. and seized control of the portfolio. A federal judge at US District Court in Utah appointed Beckstead to dispose of the properties in 2011, and Deuillet says navigating the court process took the receiver two years before he selected Berkadia to market the assets.
Along with the 20 properties that have now sold to Cortland—located across Louisiana, Kansas, Oklahoma and Tennessee, in addition to the Texas and Ohio assets—it includes another eight properties totaling 1,230 units. The sale of this smaller portion of the portfolio, located mainly in the South and Midwest, is expected to close by the end of the year for just under $100 million.
Deuillet and VP Forrest Bass, both based in Berkadia's Austin, TX office, led a group of investment advisors from eleven offices to market the properties nationally. As GlobeSt.com reported a year ago, the company landed the marketing assignment on the basis of its specialization in apartment investments, national scope and integrated capital markets platform. [GlobeSt]
- Lennar Buying Site In Chandler For 283-Unit Apartment Complex
Chandler - After announcing in May 2013 that the company planned to build apartments in the Phoenix area, Lennar Mutifamily Communities already has 1,374 units targeted for four Valley locations. The company has closed on land acquisitions in Tempe and Phoenix to build 678 units in two projects and the subsidiary of Lennar Corp. in Miami, Fla. (NYSE:LEN) has deals pending to buy sites in Chandler and Tempe to develop another 696 apartments in two more multi-family communities. In a purchase slated to close the first week in November, Lennar Multifamily is acquiring a parcel in Chandler to develop 283 apartments. The 10.8-acre site wraps the northeast corner of Chandler Boulevard and McClintock Drive. Lennar Multifamily is expected to pay $4.5 million to acquire the land. The seller is Desert Viking Apartments LLC in Chandler (Niels Kreipke, principal). The cash transaction is being brokered by Mark Forrester, Ric Holway and Dan Cheyne of Berkadia in Phoenix. Kreipke's company paid just under $2.844 million to buy the property in May 2013 from the developer of the 104-room Staybridge Suites. The extended stay hotel, which opened in July, is located at the immediate corner of Chandler Boulevard and McClintock Drive. Jason Ottman, pres. of development Southwest for Lennar Multifamily, says the company hopes to start construction first quarter 2015 with completion to follow first quarter 2016. Contractor still to be selected. Development cost (land and buildings) estimated at $43 million. Lennar Multifamily is likely to bring in a joint venture partner to develop the community. Construction financing has yet to be arranged. Design plans from Whitneybell Perry Architecture Inc. in Phoenix shows three- and four-story buildings with units ranging from about 650 sq. ft. to 1,300 sq. ft. Monthly rental rates on the studio, one-, two- and three-bedroom units projected to run from $900 to $1,600. BREW has previously reported Lennar Multifamily planning to develop two apartment communities in Tempe and one in Phoenix. In the first apartment property to open in the Valley, Lennar has teamed up with The Resmark Cos. in Los Angeles, Calif. to develop a 328-unit complex along the Tempe Town Lake at 601 W. Rio Salado Parkway in Tempe. That project, called Skywater at Town Lake, opened this summer. In July, BREW reported Lennar Multifamily planning to develop 395 apartments in another community located near Arizona State University. That 6.7-acre site, located at Dorsey Lane and Apache Boulevard in Tempe, is being assembled in two acquisitions set to close in mid-2015. The planned apartments, being called The Hayden at Dorsey Station, should be under construction third quarter 2015. In a $12.75 million sale completed earlier this month, a company formed by Lennar Multifamily purchased a 5.5-acre parcel at the northwest corner of Central Avenue and McDowell Road in Phoenix that will be developed as a 368-unit apartment complex called The Muse. Construction is set to start mid-2015. Ottman says Lennar Multifamily is looking for parcels to develop additional multi-family communities in the Valley and would especially like to secure an apartment site in Old Town Scottsdale. Kreipke, who operates as Desert Vikings Cos. has been buying urban infill properties to develop residential and commercial projects in the Valley. Kreipke is interested in more real estate investment and development opportunities. Find out more from Ottman at (480) 718-1377. Call Kreipke at (480) 216-1195. Reach the Berkadia agents at (602) 955-1122. [Brew]
- Multifamily Asset Sells for $21M
PHOENIX—Berkadia Commercial Mortgage LLC announced today the sale of Esteban Park, located at 5611 S. 32nd St. in Phoenix. The multifamily asset sold for $20.7 million. The seller was Esteban Park Apartments LLC of Scottsdale; the buyer was Carlibach LP of Mill Valley, CA. The property was 98% occupied at the time of sale.
Senior partner Mark Forrester, partner Ric Holway and vice president Dan Cheyne of Berkadia's Phoenix office negotiated the transaction.
Built in 2008, the 204-unit property features one-, two- and three-bedroom floor plans. Each unit features fully equipped kitchens, granite countertops, custom cabinetry, washers and dryers, ceiling fans, hardwood flooring, air conditioning, spacious closets and balconies/patios. Community amenities include a swimming pool, Jacuzzi, spa, ramadas, clubhouse, fitness center, volleyball, billiards, carports and controlled-access gates. Select units have pantries, extra storage and mountain views.
Forrester tells GlobeSt.com, "There are not a lot of apartments in the area. In fact it is very difficult to get zoning for apartments in that location. Esteban Park is only one of four or five in the general area."
Forrester also said the deal took a little longer to execute because it was an assumption of an FHA loan. "The terms were 35 years at 4%. It just takes longer when it's an FHA loan," he says.
The community is located convenient to Interstate 10 and State Route 60, providing residents access to the entire Phoenix area. Esteban Park is less than five miles from Phoenix Sky Harbor International Airport and six miles from South Mountain. Top employers in the immediate area include Southwest Airlines, Phoenix Sky Harbor International Airport, Arizona Grand Resort and Honeywell Aerospace.
Forrester says the buyer will keep the same management company has no major plans for upgrades.
At 6.4 percent in the third quarter, Phoenix metro vacancy was down 20 basis points from one year ago. Operators advanced rents 2.6 percent during the last four quarters to $837 per month. [GlobeSt]
- EXCLUSIVE: Multifamily in Mesa Goes for a Song
PHOENIX—Berkadia Commercial Mortgage LLC has facilitated the sale of Villas de Merced, located at 520 N. Mesa Dr. in Mesa. The seller was Mercy Housing Arizona-I LP of Denver. The buyer was Sonoma Heights LLC of Scottsdale.
Vice president Dan Cheyne of Berkadia's Phoenix office negotiated the transaction.
Villas de Merced sold for $6.2 million. The sales price reflects a per-unit price of $64,583, or $71 per square foot. The property was 98% occupied at the time of sale.
Cheyne tells GlobeSt.com the property is well-positioned: "It's just north of downtown Mesa and within one mile of the extended light rail, in areas of high growth."
"The property is deed restricted. The land use restriction designation requires that the 100% of the property be leased to those with 60% of area median income," says Cheyne.
Built in 2000, the 96-unit property features one-, two-, three- and four-bedroom floor plans. Property amenities include a swimming pool, business center, child-care center and laundry facility. Select units have washer and dryer hookups.
"This property really caters to families," Cheyne says. "It's extremely unusual to see a four-bedroom unit in a property built in 2000. There are also very big patios for this year of building."
The community is located convenient to State Route 60 and Loop 202, providing residents access to the entire Mesa area. Villas de Merced is fewer than two miles from downtown Mesa and two and a half miles from Mesa Country Club. Top employers in the immediate areas include Banner Desert Medical Center, Mesa Community College, Hospice of the Valley and General Dynamics C4 Systems.
Cheyne says the deal was a buy and hold cash flow acquisition.
At 6.4 percent in the third quarter, Phoenix metro vacancy was down 20 basis points from one year ago. Operators advanced rents 2.6% during the last four quarters to $837 per month. [GlobeSt]
- EXCLUSIVE: Hot Market MF Sells
TUCSON-Berkadia Commercial Mortgage LLC announces the sale of Zona Rio, located at 1001 West St. Mary's Road in Tucson. Senior partner Art Wadlund and associate Clint Wadlund of Berkadia’s Tucson office negotiated the transaction.
Zona Rio sold for $9.7 million. The sales price reflects a per-unit price of $46,381, or $74 per square foot.
Clint Wadlund tells GlobeSt.com, "The submarket is really strong - it's one of the hottest markets, right near the new, modern streetcar path that goes right up to the University of Arizona. There are hundreds of millions of dollars of amenities - restaurants, student housing, multifamily, shopping, housing and entertainment in the area. It's a market rate property - about 40% students - so it's a great property for that market."
Built in 1983, the 210-unit property features one- and two-bedroom floor plans. Additionally, property amenities include a resort-style swimming pool, spa, volleyball court, clubhouse with kitchen, theater room, 24-hour laundry facility, barbecue areas, direct access to hiking, biking and jogging along the Santa Cruz River Park Trail and free X-Fit and yoga classes. Each unit offers fully-equipped kitchens, balconies/patios and cable/internet access. Select units feature walk-in closets and outside storage.
The seller was an entity of Capital Texas Properties of Austin. The buyer was Zona Rio Investors LLC of Newport Beach. [GlobeSt]
- EXCLUSIVE: LA Buyer for Tucson Townhomes
TUCSON—Berkadia facilitated the sale of Paseo Del Sol Townhomes, located at 6280 S. Campbell Ave. in Tucson. The seller was Bayview Loan Servicing LLC of Coral Gables, FL; the buyer was Summit Paseo Del Sol LLC of Los Angeles.
Art Wadlund and Clint Wadlund of Berkadia's Tucson office negotiated the transaction.
Clint Wadlund tells GlobeSt.com the submarket is due south of the University of Arizona.
"It is a very unique property in that it features all three- and four-bedroom units," says Clint Wadlund. "It's also a very tight-knit community centered around the nearby school—Sunnyside—they take a lot of pride in their community."
The asset traded at a 7.8 cap rate. "It was definitely a yield-driven property. We will see some improvements made by the buyer."
Built in 1994, the 152-unit property features three- and four-bedroom floor plans and is situated on 11.3 acres of land. Additionally, the property amenities include a swimming pool with sundeck, laundry facility, barbecue grills and dog park. Each unit offers a full-size washer/dryer connection, air conditioning, fully equipped kitchens, breakfast bars and private entries. Select units include wooden plank floors.
Paseo Del Sol Townhomes sold for $8.4 million. The sales price reflects a per-unit price of $54,934, or $50 per square foot. The townhomes have been 95% to 100% occupied over the last six months. [GlobeSt]