LAS VEGAS-The owner of St. Clair Apartments, a 187-unit garden-style community here, has refinanced the property with a $17-million mortgage loan from the Irvine, CA office of Johnson Capital. Loan proceeds were used to consolidate the existing first and second mortgages on the property and recoup $3.5 million in equity that was used to develop the three-year-old class A complex.

St. Clair Apartments is located at 5450 S Fort Apache Rd. in the Spring Valley submarket area of Las Vegas. Vacancy is approximately 6%. One of the owners is James J. Bohan, owner of Crossroads Realty, a local commercial real estate brokerage. Bohan tells GlobeSt.com he decided to refinance four years early because increasing rents had increased the value of the property and he wanted to lock in a low interest rate for the next 10 years.

The 10-year loan was financed through the Freddie Mac Streamlined Refinance Program and carries a fixed interest rate of 5.61%. The loan, which is interest-only for the entire length of the term, represents 70% of the property value and was underwritten to a minimum 1.15x DSCR.

The loans that were paid off also were with Freddie Mac. Freddie Mac waived a portion of the prepayment penalty associated with the existing loans and a portion of the yield maintenance premium was built into the spread of the new loan. Johnson Capital was able to close the transaction within 35 days of the borrower's application.

Bohan says he signed the loan application on Feb. 17 and it was funded late last week. He praised Johnson Capital for their "expeditious turnaround time" and Freddie Mac for being "very accommodating in negotiating the defeasance" on the existing loan.

Bohan says the same group of investors also owns Acerno Villas, an apartment complex at 9500 West Maule Ave. that it developed about four years ago. He has no plans for selling the properties. "We're portfolio builders," he says.