IRVINE, CA-The Bethany Group has acquired a portfolio of 2,873 apartment units in Florida, Texas and South Carolina from Aimco and has financed the purchase with a $159-million loan from GE Real Estate. Greg Garmon, CEO of Bethany, tells GlobeSt.com that the financing will go toward both the approximately $151-million purchase of the portfolio and improvements that Bethany plans to make as part of a value-added play.

The financing was brokered by Mark Strauss of the Newport Beach office of Cohen Financial and Steve Gunther of the Irvine office of Holliday Fenoglio Fowler. The loan was the second between Bethany and GE, which provided a $151.6-million loan in September that enabled the Bethany Group to acquire and reposition a portfolio of 12 multifamily properties.

GE's relationship with the Bethany Group and the geographic dispersion of the assets made this an attractive deal, according to Linda Gorbenko, senior director in the North America Debt Group at GE Real Estate. The properties that Bethany is acquiring with this latest loan include two complexes in Orlando; two in Jacksonville, FL; one in Tampa, FL; two in San Antonio; and two in Columbia, SC.

The five-year loan, which permits prepayment if the assets are sold before it matures, is an example of a new type of fixed-rate financing from GE. The new product offers borrowers more flexible terms and prepayment options as well as in-house asset management.

Garmon describes the Bethany Group's newly acquired portfolio, which is 90% occupied, as mainly B-minus properties that the company plans to upgrade through management efficiencies and capital improvements. He tells GlobeSt.com that Bethany, which was established in April 2003, has both value-added and stabilized properties in its portfolio, which totals 10,350 units, but the group's business plan "is really a value-added approach."

The Bethany Group typically buys properties in B-grade or C-grade properties and brings them up to a higher grade via more efficient management and capital improvements, funding its business plan through both high-net-worth individuals and institutional investors. "Most of what we do is for a three- to five-year hold," Garmon says, although the company will on occasion go out to a seven-year hold.