Steve Gunther of Holliday Fenoglio's Orange County office worked with Real Estate Partners Inc. to arrange financing for the Newport Beach-based company's purchase of the eight complexes in Virginia and North Carolina, a transaction that was reported earlier this month on GlobeSt.com. Real Estate Partners acquired the properties, which are in Virginia and North Carolina, from the Chicago-based Equity Residential REIT.
Gunther reports that the financing included $96 million in five-year, interest-only, first trust deeds to 70% through Wachovia Multifamily Capital (formerly Lend Lease Mortgage Capital), a Freddie Mac lender. The remaining $30.3 million non-participating preferred equity was secured through Wachovia Securities.
Gunther says the purchase represents "a West Coast buyer combining high leverage financing at low interest rates with the comparatively higher capitalization rates offered in East Coast markets in order to achieve maximum return on equity."
As reported earlier on GlobeSt.com, the portfolio is composed of four complexes in Greensboro, NC totaling 1373 units; one 208-unit property in High Point, NC; two properties in Richmond, VA totaling 606 units; and a 212-unit complex in Glen Allen, VA.
Real Estate Partners bought the Equity Residential portfolio via RepFund Apartments II LLC. Real Estate Partners Inc. also owns and operates Orange Coast Commercial Inc., which does business as Coldwell Banker Commercial REP.
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