Crystal Springs Apartments

AVONDALE, CA-Johnson Capital’s Phoenix office originated $25.7 million in refinancing to retire maturing debt on the 400-unit Crystal Springs Apartments. Owner Crystal Springs Phase II LLC, which has owned the asset since 2008, obtained non-resource permanent financing that came with a fixed rate for the five-year term and a 30-year amortization period for the class A property.

Crystal Springs Apartments is at 11885 W. McDowell Rd., and was built in two phases between 2002 and 2004. The property offers one-, two- and three-bedroom units and was 95% leased. Riverstone Residential Group manages the property.

Johnson Capital senior vice president Don Burnes worked on behalf of the property’s owner, a private investor based in Roseville, CA. The financing was structured to allow the lender, a Wall Street firm, to securitize the majority of the debt and to create a mezzanine piece post-closing. The mezzanine portion will likely be sold to one of the Wall Street firm’s investor clients through a private placement.

“The significant run-up in interest rates and spreads about three weeks before closing necessitated the switch to senior/mezz debt structure to get to a funding level that would work for both the lender and the borrower,” Burnes says. “Everyone from the borrower to the lender to the title company pulled out all the stops to make this deal happen.”