Regional news

Maryland

389-unit luxury apartments convert to condos

Hunt Valley—Hunt Valley, LLC, an affiliate of the Will Cos., purchased a recently constructed 389-unit luxury apartment and townhouse community in this north Baltimore suburb.

Corus Bank provided a $70 million loan for the acquisition and the conversion of the units to condominiums. Cushman & Wakefield represented the borrower in the transaction.

Home buys three complexes for $76.5 million

Home Properties has acquired three apartment complexes in Maryland and Massachusetts, totaling 744 units. "We are pleased to have completed over $100 million in property acquisitions this quarter," said Edward Pettinella, president and CEO. He added that the company is expecting to acquire $150 million in apartments this year.

The 240-unit Apartments at Wellington Trace in Frederick, Md., was bought for $29.5 million, funded through Home Properties' line of credit. It was 94% occupied at the time of closing, with rents averaging $1,123. Built in 2002, the one- to three-bedroom units are part of a mixed-use planned community that includes new single-family homes and townhouses.

The other two properties purchased were the $27 million, 276-unit Village at Marshfield in Marshfield, Mass., and the $20 million, 228-unit Woodleaf Apartments in Silver Spring, Md.

Virginia

Patriot Village breaks ground

Merrifield—KeyBank Real Estate Capital has provided $48 million in a three-year revolving construction loan to DSF Investors, LLC, for the construction of the 436-unit Patriot Village at Dunn Loring. The loan follows a $5.6 million mezzanine finance package previously issued to DSF for the site development of this project.

"Investors and developers are increasingly seeking financing packages from us that include both mezzanine and construction loans," said Claudia Piper, senior relationship manager at KeyBank.

Belvedere Apartments begins construction

Midlothian-Belvedere Properties, LLC, has taken out a $26.5 million, 40-year loan from Highland Mortgage Co. at 5.6% for the construction and permanent financing of the 296-unit Belvedere Apartments. The loan was underwritten and insured through the Federal Housing Administration's Sec. 221(d)(4) program.

The general contractor on the project is KBS, Inc., and the management company is RAM Partners, LLC.

Illinois

Chicago plans downtown zoning changes

Chicago—Under a proposed zoning reform, downtown developers would be able to build larger projects if they included affordable housing. At press time, changes were expected to be finalized by the end of May.

If approved, developers could receive an additional three square feet of bonus market-rate space for each square foot of affordable housing space built, according to a February city zoning ordinance draft. Developers could also get the bonus space (without building affordable housing) by contributing money to the city's Affordable Housing Opportunity Fund, which would finance affordable housing elsewhere in the city.

The overall zoning plan calls for four new downtown districts:

• Residential—for areas having either solely residential buildings or buildings with small-scale commercial uses on lower floors and residential units above;
• Mixed-use—intended for office, commercial, public and institutional uses, as well as for residential development;
• Core—promoting high-intensity, office and employment growth within the Loop; and
• Service—for uses ranging from large distribution and shipping centers, to small-scale commercial and light-industrial operations, to big-box retailing.

Other provisions include parking maximums (for the first time) to control the size of the large parking podiums of residential high-rises.

Wisconsin

JV converts industrial buildings to housing

Milwaukee—CommonBond Communities, Inc., and Schultz Development Group, LLC, have begun an $18.5 million conversion of the downtown Teweles Seed Co. buildings here that will yield 115 units. They bought the property from local retired industrialist Herb Hatcher for an undisclosed price.

The development is being financed by $7.5 million in federal low-income housing tax credits, which were purchased by Simpson Housing Solutions, Inc. It will have 68 units set aside for tenants earning no more than 50% of the area median income.

The remaining apartments and penthouses will rent at market rate, which is from $960 to $1,800.

The two residential buildings will include 100 parking spaces.

New York

Sterling provides $6.2 million for tower acquisition

New York City—As part of Sterling National Bank's expansion of its commercial real estate lending activities in the New York marketplace, the bank has financed the acquisition and planned condominium conversion of a luxury residential tower here.

Real estate investors in Philadelphia spearheaded the acquisition of the building at 415 East 57th St. Plans for the property include a further refurbishing of both the interior and exterior of the building prior to offering units for sale.

Texas

Saint Francis undergoes 74-unit expansion

Fort Worth—Saint Francis Village, a lakeside seniors housing development, is undergoing rehabilitation and a 74-unit expansion here in a growing hub for retirement centers.

Saint Francis was built in 1964 and did not lease up as expected. The Federal Housing Administration (FHA) subsequently foreclosed on it. Today, the property has a waiting list of more than 400 people. Malone Mortgage Co. provided the $16.3 million, FHA-insured rehabilitation loan that is making the much-needed expansion possible. "The location of the property was ahead of the times," said Bud Malone, president of Malone Mortgage.

The Sec. 221(d)(4) loan has a 5.7% interest rate, a 40-year term and an 88% loan-to-value ratio. The money will help to refinance the remaining $2 million balance owed on the original loan and to fund the construction of the new units and a 10,000-square-foot activity center.

Rents range from $545 to $690 for the one- and two-bedroom units. Some of the larger units rent for $1,000.

Located on Interstate 20 about a 10-minute drive from Dallas, the area has been experiencing accelerated development activity. About 2,000 to 3,000 units of seniors housing and a regional mall are being built nearby, said Michael Cottrell, a member of the board of directors and the construction supervisor.

Some of the remodeling on the old units was financed with help from the residents themselves. The last two annual fundraisers they had raised nearly $60,000 to install energy-efficient windows in each of the units, said Cottrell.

Florida

CWCapital closes first mezz loan

Fort Lauderdale—CWCapital's mezzanine finance group closed its first loan on The Vue, a $57 million, ground-up condominium project here. The investment, made on behalf of CWCapital's parent company, CDP Capital-Real Estate Advisory, is the first mezz transaction to close since the group was acquired from Lend Lease Corp. in December.

The $9.5 million loan was provided to The Cornerstone Group. More than 80% of the 157 units had been pre-sold by March, and construction is expected to be completed by the summer of 2005. Wachovia is providing a $42 million senior loan.

North Carolina

Colonial expands in Raleigh/Durham market

Arringdon—Colonial Properties Trust has acquired the 320-unit Colonial Grand here in an effort to expand its holdings in the Raleigh/Durham market. The property, built in 2001, was acquired from ContraVest, Inc., through Colonial's line of credit.

California

Army privatizes housing at 3 military installations

As part of the U.S. Army's Residential Communities Initiative Program, the Army and Clark Pinnacle California Military Communities, LLC (CPCMC), are working together to develop military family housing at three military installations here: Fort Irwin in San Bernardino County, Moffett Field in Santa Clara County, and Parks Reserves Forces Training Area in Alameda County (RFTA).

CPCMC is a joint venture between Clark Realty Capital and Pinnacle. The partnership has raised more than $360 million for these projects. When the initial development plan is complete, CPCMC will manage a total of 2,376 homes and 200 apartments at Fort Irwin, 316 homes at Moffett Field and 114 homes at Parks RFTA. Demolition and construction will begin this summer.

StarPoint renovates Le Club

Moorpark—StarPoint Properties, LLC, has purchased Le Club, a 370-unit, garden-style apartment complex here from Archstone-Smith for an undisclosed price. The listed price was $58.5 million. Financing included a 10-year, $40.7 million Fannie Mae loan by ARCS Commercial Mortgage Co., L.P., at a fixed rate of 4.94%.

"Multifamily properties in Southern California are holding their value, and in this case, the location caters to the affluent market," said Paul Daneshrad, StarPoint's CEO. "Once we've repositioned the apartment building through an aggressive $2 million renovation effort, the residents will not only enjoy a better environment, we will be able to increase the value of the complex."

The development will include a 1,000-square-foot fitness center and a business center. Marcus & Millichap helped arrange the transaction.

Art deco apartments get $3.1 million renovation

Los Angeles—Chateau Du-Val, LLC, a 40-unit building here, was sold to an individual investor, Richard Stromberg, for $3.1 million. Charles Dunn Co. brokered the transaction.

"Chateau Du-Val was constructed in 1929 and is truly art deco in design, including a slate roof and leaded glass windows," said Albert Shilton, Charles Dunn senior managing director. "Aside from the unique architecture, the building wasn't rent controlled so the buyer could renovate the units and raise the rents to market," he added.

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