Recent Transactions

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Beech Street Capital, LLC announced today that it closed a $9.0 million Fannie Mae conventional loan to refinance the Block 2 Lofts, a 145-unit property in downtown Little Rock. Built between 1921 and 1929, the property was converted to loft-style apartments in 2001. It also includes 32,850 square feet of commercial space. Joel Mazur, vice president of originations in Beech Street’s Chicago office, originated the transaction. The principals purchased the property in 2011, knowing that it had significant value-added potential. At the time of purchase, just 51 percent of the commercial space was occupied,and the leases that were in place were set to expire within 14 months. The principals invested substantial capital to improve the vacant space and devoted themselves to renewing the existing leases and leasing up the vacant space. Currently, the commercial space is 73 percent occupied and all tenants have long-term leases. The principals’ overriding priority was to repatriate part of the equity it had invested in the property before the end of 2012. Beech Street closed the deal with two weeks to spare. Beech Street felt comfortable with the cash out requirement because of the principals’ substantial experience, the improvements they made to the property during their year of ownership, and the resulting increase in cash flow. “It was clear from the very start that the principals thoroughly understood their business,” Mazur says. “Our role at Beech Street was to facilitate their achieving their goals.” The Block 2 apartments consists of three buildings of between three and nine stories located within blocks of the River Market District, Little Rock’s restaurant, retail, and entertainment center. The apartments are designed to attract Little Rock’s metroprofessionals. The spacious loft-style units feature 12-16 foot ceilings and have cement floors, warehouse windows, and exposed ductwork, as well as exposed brick walls in select units. The fixed-rate loan has a 15-year term with 14.5 years of yield maintenance and 30 years of amortization, payable on an actual/360 basis.
Beech Street Capital, LLC announced today that it closed $7.4 million in Fannie Mae conventional loans to refinance a portfolio consisting of two Boston-area apartments, totaling 56 units. Brian Sykes, senior vice president of originations in Beech Street’s Boston office, originated the transaction. “This was a fairly straightforward deal,” says Sykes. “Our goal was to meet the borrower’s objective of completing the deal before the end of the year—and working through the holidays we met their deadline.” Both properties have been well maintained. They consist of a 22-unit garden-style apartment building in Cambridge and a 34-unit garden-style apartment building in Allston. They are in strong submarkets with high occupancy rates and steady rent increases forecast over the coming years. The fixed-rate loans have a 10-year term and 9.5 years of yield maintenance with 30 years of amortization, payable on an actual/360 basis.
Beech Street Capital, LLC announced today that it closed seven Fannie Mae DUS loans totaling $42.8 million for the acquisition of seven manufactured housing communities located in Arizona, Michigan and Texas. The transactions were originated by Damon Reed, vice president based out of Beech Street’s Birmingham, Alabama office. The borrower on the transactions is a longtime client of Mr. Reed’s and is a repeat Beech Street customer.The portfolio of properties consists of five communities located in Michigan, one located in Texas and one in Arizona. The communities are all-age, three to four-star MHCs containing a total of 2,232 spaces. The majority of the spaces at each community will accommodate multi-sectional homes. All of the homes have off street parking, some of which are designed with two-car covered carports. Amenities include on-site leasing offices, community centers, parks, basketball courts, swimming pools, club houses, play grounds, RV/Boat storage, laundry rooms, carports and garages. The fixed-rate loans have 10-year terms with a 30-year amortization schedule on six of the loans and a 25-year amortization on one of the loans. The all-in rate for each of the seven loans is in the four percent range.
Beech Street Capital, LLC announced today that it closed an $8.6 million Fannie Mae conventional loan to refinance the Enclave at St. Lucie West, a 90-unit property in Port St. Lucie, Florida. Senior Vice Presidents Mitch Sinberg and Michael Wallace, headquartered in Beech Street’s Fort Lauderdale office, originated the transaction. The deal was complicated by the fact that the property was originally planned and developed as a condominium. When the first phase was completed in 2007 and only two of the 28 units were sold, it was clear to the principals that the property would be more successful as a Class A rental community. As a result, all the apartments in the remaining three phases were marketed as rentals. The Beech Street team determined that Fannie Mae financing would be the most advantageous approach for the client. “Working in Florida, Michael and I have had extensive experience dealing with fractured condos,” Sinberg says. “We were able to help the client put in place a structure that increased Fannie Mae’s comfort level with the deal.” They stressed that the borrowers had full control over the HOA and the right of first refusal if the two units owned by third parties were sold. “Mitch, Michael, and the entire Beech Street team were a pleasure to work with,” says Jerry Rich, one of the principals. “The level of expertise and experience they brought to the transaction helped ensure that it proceeded as smoothly and as quickly as possible.” The Enclave at St. Lucie West is located in a desirable Port St. Lucie area. Its neighbors include two of the city’s most popular attractions: PGA Golf Village and New York Mets spring training center. The property itself is in excellent condition and is attractively landscaped. Interior amenities include ceiling fans, granite countertops in select units, washer/dryer connections, nine-foot ceilings, walk-in closets, double sinks in master bathrooms, patios, and private one- or two-car garages. The fixed-rate loan has a 10-year term and 9.5 years of yield maintenance with 30 years of amortization, payable on an actual/360 basis.
Beech Street Capital, LLC announced today that it closed a $17 million Fannie Mae Dedicated Student Housing loan to refinance the College Station Portfolio, which consists of 264 units in nineteenproperties owned by ROAR, LLC, in Tuscaloosa, Alabama. Chad Thomas Hagwood, executive vice president of loan originations for Beech Street, originated the loan, and Brandon E. Pate managed the transaction. “The College Station Portfolio was an excellent fit for Fannie’s Dedicated Student Housing program,” notes Hagwood. “ROAR has a proven track record with student properties, and the properties themselves, within walking distance of campus, are in very high demand with University of Alabama students.” The properties typically operate at 99 percent occupancy. The interest rate on the loan was in the low four percent range. The complexity of the portfolio, with 19 properties built between 1920 and 1992 clustered in three groups around the campus, proved no obstacle to Beech Street’s team. “The hallmark of the Beech Street approach is our ability to adapt to our borrowers’ circumstances,” Hagwood notes. The Tuscaloosa apartment market is dynamic and very active, fueled by the dramatic growth of the University of Alabama over the past ten years and the redevelopment that has occurred in the wake of the devastating tornados that hit the city in April 2011, including a multimillion dollar downtown urban renewal project. The fixed-rate loan has a 10-year term and 9.5 years of yield maintenance with 30 years of amortization, payable on an actual/360 basis.
Beech Street Capital, LLC, announced today that it closed a $8.4 million Fannie Mae conventional loan for the acquisition of South Orange Towers, a mid-rise apartment totaling 108 units, in Orange, New Jersey, a suburb in the New York MSA. The transaction, originated by Avi Weinstock and Josh Rhine of Meridian Capital Group, LLC, was financed by Beech Street Capital as part of its correspondent relationship with Meridian. The borrower is a repeat Beech Street customer, having closed a $19.4 million transaction with the company in 2012.
Beech Street Capital, LLC, announced today that it closed a $9.6 million Fannie Mae MAH loan for the acquisition of Bella Vista apartments, a 150-unit affordable multifamily property in El Cajon, California, in the San Diego MSA. Kristen Croxton and Greg Reed, executive vice presidents in Beech Street’s office in Newport Beach, California, originated the transaction. This is Beech Street’s third transaction with the borrower and the fourth with the broker, Chris Hutchison of Alcole Capital Group. “This transaction is the perfect illustration of Beech Street’s ability to apply our expertise in affordable housing for our clients’ benefit,” says Croxton. “It is also a sign of our growing presence in this market.” Bella Vista Apartments was the last real estate asset in California held by an institutional investor eager to divest its holdings in the western United States. The Beech Street team was able to underwrite to a welfare tax abatement to be secured by the borrower during the first year of the loan. “The borrower successfully achieved a similar tax exemption for a property we financed last year,” Reed says. “We felt confident the borrower could achieve the same for the Bella Vista.” Beech Street’s detailed understanding of the borrower’s ownership, management style, and local portfolio also aided the team in aggressively underwriting forecasted expenses that reflected the condition of the property. “Beech Street made the case that the sponsors’ investment strategy is to improve property operations by reducing operating expenses that are substantially above market, completing renovations to improve property appeal and condition, and then maximizing rents,” Hutchison says. “This made them a good fit for Bella Vista.” Bella Vista consists of two separate but contiguous properties operated as one property. It comprises 10 two-story residential buildings, one common/office building, and two laundry facilities. Amenities include a swimming pool and playground. The property has easy access to the San Diego MSA and downtown El Cajon.