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HOUSTON-Behringer Harvard Multifamily REIT I, Inc. and partner PGGM Private Real Estate Fund bought out the developer’s ownership interest in the recently completed, 330-unit Eclipse. As part of the transaction, the partners paid off $21 million remaining on the mezzanine construction loan and obtained fee simple title to the land, owned by the state of Texas, for $4.6 million.

Behringer Harvard chief administrative officer Jason Mattox says the joint venture provided initial capital for the development at 1725 Crescent Plaza, which was being built by Simmons Vedder Partners of Houston. Steinberg Design Collaborative was the designer. Greystar Management’s local office will oversee leasing and property management.

Mattox tells GlobeSt.com that the asset is in a great location, with outstanding amenities. “This complements our overall multifamily portfolio, and we’re pleased to have complete control of the asset,” says Mattox, adding that the complex is close to lease-up. Behringer Harvard Multifamily REIT I Inc.’s portfolio consists of 17 complexes in 10 states, with a total of 4,937 units.

According to a recent SEC filing, Behringer Harvard Multifamily REIT I and PGGM owned a 50.1% limited partnership interest in Eclipse, with an $8.1 million investment in a 9.5% mezzanine loan. The property entity was also subject to a senior mortgage loan of $38.1 million and a long-term ground lease with the state of Texas.

In conducting the deal, the joint venture acquired the remaining interest for $100,000, assuming the senior mortgage loan and long-term ground lease. At the time, the partnership converted the mezzanine loan investment to an equity investment and paid off the entire balance of the senior mortgage loan plus accrued interest and obtained the feel simple title from the state. The filing also noted that the transaction was funded through capital contributions coming from the proceeds of its IPO.

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