shopping for a mergerpartner,

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GlobeSt.com has confirmed through Deutsche Bank BerkshireMortgage that the prized asset was unencumbered and representedPost's first loan from Freddie Mac. Because it was a first withFreddie, the bank's spokesman says it took awhile to negotiate.Deutsche Bank's mortgage banker wasn't available for an interviewabout the Post deal, which apparently was inked awhile ago and keptas low profile as possible. Situated at 5009 Addison Circle, PostAddison Circle contains 1,334 apartments, 41,000 sf of office,108,725 sf of retail and a 234-unit self-storage facility.According to Post's SEC filings, the apartments' economic occupancyis 94.6%.

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In setting up the loan, Post created a special-purpose entity,Post Addison Circle LP, and transferred the deeds at the end ofJanuary, based on information from Dallas Central AppraisalDistrict. The county has a $125.29-million assessment leviedagainst the high-profile development.

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"Freddie Mac remains an excellent source of mortgage capital inthis volatile market," Kip Kimble, a director for the New YorkCity-based Deutsche Bank, says in yesterday's press release aboutthe interest-only financing. "We were able to deliver a creative,highly structured and flexible financing package that bestaddressed the borrower's needs."

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A Post analyst points out that only highly qualified borrowers,like the Atlanta REIT, have been able to get Freddie Mac and FannieMae financing in today's topsy-turvy capital markets. The analystadds it's also highly likely that the strategy was a tool foradditional fuel for Post's $1.3-billion construction andpre-development pipeline.

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Post has six apartment complexes, one expansion and two condoprojects under construction, creating a $585.6-million pipeline. Italso has land in pre-development stages for another 3,312apartments and about 198,000 of retail, equaling an estimated $750million of construction costs.

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In its SEC filing, Post reported interest expense would be lowerthis year due to increased interest capitalization resulting fromits developments, lower debt levels and lower interest rates on itsvariable-rate, unsecured debt. Post reported proceeds from the$120-million loan went to repay the variable rate, unsecureddebt.

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[IMGCAP(2)]Post Addison Circle is collateral for a seven-yearfixed-rate loan, with an automatic one-year extension at a floatingrate. In its earnings release, Post reported interest was fixed at4.88% and the floater priced at 168 basis points over the USTreasury rate.

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Post Addison Circle's 10 buildings were built between 1998 and2000. The package represents roughly one-third of Post's existing3,464-unit portfolio in Dallas, but it does have at least twoprojects in its pipeline.

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