Multifamily REIT Buys Waterford Apts. for $80M

Waterford Place consists of four five-story buildings on 8.2 acres at 4800 Tassajara Road in Dublin, a city in Alameda County located approximately 35 miles east of San Francisco near the confluence of interstates 580 and 680. Completed in 2003, the property sits adjacent to the Shops at Waterford retail center, one mile from the Dublin/Pleasanton BART station. Vacancy in the apartment complex is approximately 3.3%, according to Behringer Harvard. Alliance Communities will provide on-site property management.

The assumed debt consists of a first mortgage loan with an outstanding balance of approximately $47.5 million and a second mortgage loan with an outstanding balance of approximately $13 million. The first loan bears interest at a fixed rate of 4.67%, with a 30-year amortization period and an initial maturity date of May 1, 2013, not including an automatic one-year extension that carries a higher interest rate. The loan may be prepaid in full, but not in part, anytime prior to May 1, 2013, for 1% of the principal being paid. There is no penalty for prepayment after May 31, 2013.

The Second Loan bears interest at a fixed rate of 5.45%, with a 30-year amortization period and an initial maturity date of May 1, 2013. Like the first loan, the second loan includes an automatic one-year extension and may be prepaid in full only for 1% of the principal being paid.

Dallas-based Behringer Harvard Multifamily REIT I owns Waterford Place through Behringer Harvard Waterford Place REIT LLC, its joint venture with Stichting Depositary PGGM Private Real Estate Fund. Behringer Harvard Multifamily REIT I owns a 55% interest and Stitching owns the remainder. Behringer Harvard paid its portion of the $19.2-million equity requirement for the purchase in cash from proceeds of its public offering of common stock.

Alliance Communities will provide property management services at Waterford. Its contract for the property management of Waterford includes 3.75% of monthly gross revenues and reimbursement for out-of-pocket costs and personnel costs.

Including Waterford, Behringer Harvard Multifamily REIT I Inc. has investments in 3,630 apartment units in 12 apartment communities that represent more than 3,630 multifamily units in eight states.