unit complex built in 1987.
NEW YORK CITY-A New York high-rise was among four multifamily properties that national financial services organization TIAA-CREF was able to refinance through CBRE’s Capital Markets group. The group put together a $223.1-million deal for the properties, which also included apartment buildings in Los Angeles, San Diego and Dallas.
Brian Eisendrath, who heads CBRE’s Multifamily Debt and Equity Finance team out of Los Angeles, arranged the 10-year fixed-rate loans through Freddie Mac. All of the properties have an existing Freddie Mac mortgage, and all were originated prior to Freddie Mac launching its capital market execution, which allows them to reduce their balance sheet holdings.
Eisendrath says New York-based TIAA-CREF was looking for a fixed-rate, and the deal was cash neutral. He says all of the buildings are in excellent condition and the funds will not be used for renovation, adding that CBRE encountered no major challenges related to the deal.
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The Manhattan property involved in the deal is The Colorado, a 35-story, 256-unit apartment complex built in 1987. The ground floor features two retail spaces currently occupied by Banana Republic and PURE Yoga. The building has good transportation access at the intersection 86th Street and 3rd Avenue on Manhattan’s Upper East Side near several metro stops.
“We approached TIAA with the idea of refinancing these assets as a means to lower their interest expense significantly,” Eisendrath says. “This strategy, combined with our ability to waive a portion of the prepayment penalty, also helped TIAA save money on refinancing the assets. Additionally, it secured the cost of capital for the next 10 years. Through the construction of a complex financial model, we were able to show TIAA how this refinance would increase the IRR to investors.”
The other TIAA-CREF properties are:
•The Legacy at Westwood in Los Angles, a 187-unit class A apartment complex built in 2000. It is currently undergoing renovations;
•Regents Court in San Diego, a 251-unit, luxury apartment complex built in 2001 and located near the University of California, San Diego; and
•The Caruth in Dallas, another Class A property, built in 1998 with 338 units. It is located less than six miles from Dallas’ Central Business District.
TIAA-CREF owns $18 billion of primarily high-quality properties in the office, retail, industrial and multifamily sectors across the US, Canada and Western Europe.