AURORA, CO-Berkeley Point Capital LLC recently closed a $31.6-million loan for the acquisition of Sommerset Gardens, a 420-unit garden-style, class-B apartment community located in Aurora, CO. The financing was structured under the Fannie Mae Delegated and Underwriting and Servicing program as a 12-year term with five years of interest-only at a fixed rate of 4.27%.
Built in two phases in 1981 and 1983, the property recently underwent minor renovations by the previous owner. The sponsor, Kennedy Wilson, plans to spend approximately $5 million to further upgrade the property.
The planned renovations include interior unit upgrades, exterior painting and siding repairs, landscaping and exterior lighting. Kennedy Wilson also plans to renovate the leasing center, upgrade the fitness center, convert the property to controlled access, add BBQ areas and a tot lot.
Sommerset Gardens is both job- and transportation-centric, according to Berkeley Point Capital, and is “ideally positioned for a value-add program.” Just east of I-225 with excellent visibility on Mississippi Ave., the property is adjacent to a regional shopping center and between two future light-rail stops along the I-225.
“Kennedy Wilson’s overall objective is to rebrand and remarket the property with a high quality rehab and capitalize on its proximity to the light-rail that is currently under construction nearby,” explains Nick Bridges, acquisitions manager at Kennedy Wilson. “Berkeley Point provided a long-term fixed rate loan with a significant interest-only period that will accommodate this planned renovation program.”
According to Mitch Clarfield, senior managing director of Berkeley Point Capital, the team was able to quickly underwrite the transaction and “get in a position to rate lock before changes to the credit markets took effect.”