East Orange, NJ — Beech Street Capital, LLC an- E Abe Shonfeld of Meridian Capital Group, LLC, was financed by Beech Street Capital Beech Street Capital closes a $20.0 million Freddie Mac loan to refinance NJ apartment F inancial D igest www.marejournal.com Mid Atlantic Real Estate Journal — May 10 - 23, 2013 — 13A
nounced today that it closed a $20.0 million Freddie Mac loan to refinance Norman Towers, a 406-unit property in East Orange. Norman Towers is a 100 percent Section 8 Housing Assistance Payment (HAP) property and is also restricted to tenants who are 62 years old and older or disabled. The transaction, originated by Abe Shonfeld of Meridian Capi- tal Group, LLC , was financed by Beech Street Capital as part of its correspondent relation- ship with Meridian. The borrower developed the property in 1980 and has owned and operated it since that time. The property is currently subject to a 20-year HAP contract that runs until 2030. In refinancing the apart- ment, the borrower desired to take advantage of historic low interest rates as well as cash out some of its equity in the property. “The entire transac- tion proceeded smoothly,” says John Cicchino , the borrow- Alexandria, VA — With the $78 million acquisition of Hunting Point, a 530-unit apartment complex on Potomac River in Alexandria, Lubert- Adler of Philadelphia, PA has amassed a multifamily portfo- lio valued at approximately $2 billion for its domestic institu- tional investors. The company’s Fund VI, VI-A and VI-B co-investment pool, launched in January of 2010 with over $1 billion in eq- uity, has now acquired, among several asset classes, some 70 multifamily properties total- ing over 20,000 units, valued at over $2 billion. Most of the assets were acquired in the last 18 months. “In 2010, we made a strategic decision based on the belief that multifamily rental apartments provide one of the best oppor- tunities to create risk-adjusted
Norman Towers
Pyramid Pines
er’s managing member. “Beech Street was very responsive to our needs and is committed, as we are, to providing safe and accessible housing for New Jersey seniors.” The borrower, who also man- ages the property, has kept it in excellent condition. Common area amenities include a base- ment that houses a community
kitchen and common room for gatherings and activities, as well as a commissary store. There is also a commercial- quality laundry room available for tenant use on the ground floor. The building is monitored 24 hours/day by front desk per- sonnel. Unit amenities include full kitchens and emergency pull cords in bedrooms and
bathrooms. The fixed-rate loan has a 10-year term, two years of interest only, with 30 years of amortization, payable on an actual/360 basis. SaratogaSprings,NY — Beech Street closed a $6.0 million Fannie Mae DUS loan to refinance the Pyramid Pines MHC, a 339-site “all-age” man-
ufactured housing community located in Saratoga Springs. Kristen Croxton and Greg Reed , executive vice presi- dents in Beech Street’s office in Newport Beach, California, originated the transaction. The transaction was brought to Beech Street by Michael Malik of Broadway Capital Partners . n
Lubert-Adler amasses $2 billion multifamily portfolio, 70 multifamily properties totaling over 20,000 units
focusing on transactions that are too large for local opera- tors but smaller than those that would interest the very large funds,” Adler went on. “Our goal was to buy assets opportunistically, preferably from sellers who are not in the everyday business of improving real estate, and then work with our local partners to increase current yield by renovating and repositioning the assets. Now that we have achieved our initial goal, we plan to continue this value-add program into the future.” The company’s acquisition of Hunting Point illustrates its strategy, Adler pointed out. In partnership with The Laramar Group, Lubert-Adler purchased this 530-unit com- plex just south of Old Town Alexandria for $78 million, or about $147,000 per unit,
from the Virginia Department of Transportation (VDOT). VDOT acquired the property via eminent domain in 2002 to allow for construction of the new Woodrow Wilson Bridge, which required demolition of one of the three towers. Despite its superior location, unit interiors and amenities have been untouched for years, and rents are 30-40 percent below market rate. “This was a flat tire that we can trans- form into a Class A apartment community,” remarked Adler. “There is a sentiment in the market that multifamily prop- erties are overpriced and there are no longer opportunities to generate attractive profits. We have a contrary view: stabilized assets may be overpriced, but value-add assets are on the rise because of the overleveraged environment since 2008. n
Hunting Point
superior returns, because a substantial portion of the over- all return is in the form of cur- rent yield,” explained Dean Adler , CEO and co-founder, Lubert-Adler Partners, L.P. “We aimed for overall returns
of 17-20 percent, with10-12 percent of that target coming from current yield.” “In order to execute that strategy, we sought out one-off middle-market acquisitions through local entrepreneurs,
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