FOUNTAIN VALLEY, CA—Seth Grossman, managingdirector of Meridian Capital Group LLC, andCapital One Multifamily Finance's SVPsGreg Reed and Kristen Croxtonhave arranged a $64-million refinancing ofPalm Island, an age-restricted apartment communityat 11300 Warner Ave. here, on behalf of an OrangeCounty-based sponsor. The 10-year loan, provided by aCMBS lender, features a competitive fixed rate of4.47% and interest-only payments for the full term.

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The 456-unit Palm Island property is leased to seniors 55 yearsof age and over and has amenities catering to an active lifestyle,including a 24-hour surveillance system, community center, library,card room, billiard room, fitness center, computer room and heatedpool and spa as well as numerous planned social activities.

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The transaction was a cash-out refinance of a first and secondmortgage by a new first mortgage with a lower rate. The refinancingwas originally structured in 2013 as a 10-year mortgage with fiveyears of interest-only payments. Due to volatility ininterest rates during the summer of 2013, theborrower decided to put the transaction on hold until the bondmarkets stabilized. All sides waited on standby for more than ayear as the market rebounded and the loan terms became even moreattractive. The transaction closed very quickly with significantlybetter terms then the original structure—namely, additionalinterest-only and a lower interest rate.

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The Capital One team has a long-standing relationship with thesponsor and knew the interest-only feature available in the CMBSmarket would be accretive to its business plan. Reed and Croxtonconsulted Grossman to tap into his expertise with non-agencylending. “The two platforms' complementary skill sets have been atremendous benefit for everyone involved,” says Grossman. “TheCapital One Multifamily team clearly put the client's needs first,as evidenced by their perseverance over the course of the year toclose in a short timeframe once rates were most competitive.”

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Meridian is no stranger to arranging large multifamily loans. AsGlobeSt.com reported last month, the firm arranged $66million for St. Moritz Apartments in Edgewater,NJ, for a deal purchased by a fund managed by CornerstoneReal Estate Advisers. The asset was sold by FredDaibes, who built the 224-unit development in2005. NYS Teachers' RetirementSystems provided the seven-year loan.

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Carrie Rossenfeld

Carrie Rossenfeld is a reporter for the San Diego and Orange County markets on GlobeSt.com and a contributor to Real Estate Forum. She was a trade-magazine and newsletter editor in New York City before moving to Southern California to become a freelance writer and editor for magazines, books and websites. Rossenfeld has written extensively on topics including commercial real estate, running a medical practice, intellectual-property licensing and giftware. She has edited books about profiting from real estate and has ghostwritten a book about starting a home-based business.