Lenders Open Purses to Tune of $333M in Multifamily Deals

Corus Bank of Chicago loaned $70 million to joint venture Musa/ZMG Oakmonte LLC for the purchase of the 50-building, 452-unit Oakmonte Apartments in suburban Heathrow. The site is 12 miles north of Downtown Orlando. The seller was an affiliate of locally based ZOM Inc. Musa is based in Boca Raton; ZMG in Orlando.

Colonial Bank of Birmingham, AL loaned an affiliate of locally based Watson Real Estate and Management $25.4 million. The loan was for the $27.5-million purchase of the 324-unit, 49-building Heron's Cove Apartments three miles north of Orlando International Airport.Wachovia Securities and two mezzanine lenders committed a total $57.6 million in loans to Sun Vista Development Group LLC of St. Petersburg. The capital will go for the acquisition and renovations of the 272-unit Snell Isle Apartments in St. Petersburg. The Risman family of Cleveland sold the property. Jason Shapiro, managing director, Aztec Group Inc., Coconut Grove, brokered the $180-million loan transaction. Rick Edlund, vice president and director of business development for AmTrust, agreed to the loan after only a week of negotiations with Shapiro, the Aztec broker tells GlobeSt.com.

Shapiro says the short timeframe alone was noteworthy because "there were a number of challenges associated with consummating this loan." The challenges were "a rapidly tightening credit market for condo conversions; the large size of the transaction; the relatively short timeframe to close five deals; and constantly dealing with either the threat or reality of hurricanes."

The $180-million, interest-only loan has a two-year term with two six-month extension options. The loan's interest rate is based on the Prime Rate, currently 7.25%. Shapiro credits Miguel Poyastro of GREC Conversions, with orchestrating the acquisitions, marking the company's first purchases outside of Dade and Broward counties in South Florida.

Todd F. Cohen, a director in Atlanta-based Primary Capital's Orlando office, brokered the $71.1-million and $25.4-million deals in Orlando. He tells GlobeSt.com the interest rate on the $25.4-million loan at Heron's Cove Apartments floats about Libor and has a starting rate below 7%. The seller was an entity owned by the 15 Group of Miami. Cohen tells GlobeSt.com he has been asked by Corus Bank, the lender, and ZOM, the property owner, not to disclose details of the $70-million loan.

In the total $57.6-million financing of the sale and later conversion of Snell Isle Apartments in St. Petersburg Wachovia Securities is providing the first mortgage up to $49 million. An institutional mezzanine lender is providing $7.2 million for renovations. A private lender is loaning $1.4 million and providing $3 million in equity for the 35-year-old, 16-building property with 1,600 foot of waterfront in the affluent Snell Isle community.

"Wachovia and the mezzanine groups saw the value and were the low-cost providers in a very competitively bid financing offering," says Dan E. Gorczycki, senior vice president of New York-based Granite Partners which brokered the Snell Isle transaction. "The property is an ideal [condo] conversion candidate," he adds.