TUSTIN, CA-Apartment REIT AvalonBay Communities Inc. paid $98.5 million in its recent acquisition of the 628-unit Creekside Meadows apartment complex via a fund in which the REIT has a 31% equity interest. The Arlington, VA-based REIT's purchase of the Creekside Meadows, reported previously on GlobeSt.com, was made through AvalonBay Value Added Fund II LP, a private, discretionary investment vehicle.
AvalonBay bought the property, which is at 13802-13881 Tustin East Dr., from Creekside Meadows Development LLC in a sale that was brokered by listing agents Joe Leon and Dean Zander of Hendricks & Partners. Leon and Zander reported that they conducted more than 40 property tours that generated 15 qualified offers from both private and institutional investors. The class B property is the largest apartment complex in Tustin and is situated on 23.5 acres on five separate parcels of land.
As part of the transaction, Fund II has entered into a rate lock agreement with Fannie Mae on a $59.1 million, seven-year, 3.81% fixed-rate loan to be originated on or before Sept. 16. The loan would provide for interest-only payments during the full term.
AvalonBay notes in its announcement of the deal that the complex was completed between 1968 and 1972 and "has benefited from an extensive renovation program over the past five years." Creekside Meadows represents the fourth acquisition by Fund II, which now consists of 1,542 apartment homes for a total acquisition cost of about $234 million. Fund II has equity commitments totaling $400 million and can employ leverage up to 65%, allowing for an investment capacity of approximately $1.1 billion. Fund II will acquire and operate multifamily apartment communities primarily in AvalonBay’s high barrier-to-entry markets of the Northeast, Mid-Atlantic, Midwest and West Coast
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