JV Gets $167M to Pay off Debt

By Natalie Dolce

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The Breakers Resort

(Mark Your Calendars: RealShare Apartments 2011, October 20 in Los Angeles).

DENVER-Irvine, CA-based the Bascom Group, along with Koelbel and Co. has secured $167-million in financing for the Breakers Resort, a six-village, 1,523-unit, class-A multihousing community here. The financing involved securing a $132 million floating-rate first trust deed through ING Real Estate Finance, and a $35 million mezzanine loan from Blackstone. 

According to Holliday Fenoglio Fowler, which worked exclusively on behalf of the borrower, the non-recourse loan was interest-only and featured a combined interest rate of 4.6%. Proceeds were used to pay off existing maturing debt and fund capital improvements.

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The HFF team representing the borrowers was led by director Mark Erland and associate director Charles Halladay in Orange County, and senior managing director Mona Carlton in Dallas. “The loan structure was chosen because of the competitive interest rate, the low combined loan constant, prepayment flexibility, funds available to finance capital improvements, and certainty of execution,” Erland says. “ING Real Estate Finance and Blackstone provided a very competitive combined financing structure and were highly responsive to the loan request.”

Erland points out that “We had less than one month to close the refinance, and the good working relationship between the two lenders gave HFF confidence in making the recommendation to proceed.  The borrower closed in 29 days from application, which was a testament to the skill of the combined closing team.”

Situated on 127 acres, the Breakers Resort is located at 9099 East Mississippi Ave. close to Cherry Creek, the Lowry Redevelopment and a new community shopping center. The “strongly performing” property is 96% leased and is comprised of six interconnected communities, each with their own clubhouse, surrounding a 55-acre recreational lake. 

According to HFF, the project has an attractive low density of 14 units to the acre and has a master clubhouse featuring a large fitness center with views of the Rockies, restaurant, business center, community room and private theater. The property has 50 one-bedroom and two-bedroom floorplans averaging 1,019 square feet each. Also included, is an 18.23-acre apartment development parcel, which is one of the best remaining infill apartment sites in Denver, according to HFF.

As GlobeSt.com reported in June of 2006, Bascom acquired Breakers Resort for $190.5 million. At the time, the deal was believed to be the largest apartment transaction in the history of Denver, and included “what is possibly the best remaining undeveloped parcel of land in the city of Denver,” according to Bascom.

Since 1996, Bascom has completed transactions totaling more than $6.3 billion comprising 55,0000 units and over 200 properties in California, Colorado, Washington, Hawaii, Nevada, Arizona, Utah, Georgia, and Texas. As GlobeSt.com recently reported, in a JV with the Carlyle Group, it acquired a portfolio of two properties totaling 840 units in the Denver Metro region consisting of Fairways at Lowry, a 450-unit complex in Aurora, CO acquired for $16.65 million and the 390-unit Village at Coronado in Thornton, CO acquired for $15 million. The portfolio was an all-cash sale. And in Orange County, CA, in a JV with Realm Real Estate LLC, the group recently acquired the 75,000-square-foot Anaheim Hills Office Plaza at 160 N. Riverview Dr. for $13 million in a foreclosure sale. The building was developed in 2008 and is 100% leased.

Categories: West, Multifamily, Capital Markets, Denver