"The time was right," explains William Friedman, Tarragon president. "And the rates are so low now. The properties involved have reached stability and occupancy."
In addition to the flexibility of the agreement, Friedman notes, the transaction reduces the weighted average interest rate on the seven properties covered by 81 basis points, resulting in annual savings of $777,000 to Tarragon, as compared to the cost of the floating rate project loans paid off with the facility.
"We are still in a position to sell or convert to condominiums any of the communities securing this facility without penalty or exit fee," Friedman adds. "With an initial interest rate of approximately three percent, this financing gives us the combination of low cost, complete flexibility and substantial proceeds that we were looking for."
The transaction was originated for Tarragon by its managing director-corporate finance, Ron Leichtner, who joined the company earlier this year, and for GE Real Estate by regional director Michael Gardner and director John Ward.
Earlier this year, Tarragon made a number of executive appointments to expand activities in it three divisions--investment, development and for-sale housing. Friedman commented, "Our expanding activities require seasoned and creative executives who can balance risk and opportunity. These appointments add depth to each of our three divisions."
While the company will maintain its core emphasis, it is making inroads into new market areas including New Jersey.Besides Leichtner, who is responsible for corporate acquisitions, joint ventures and project acquisitions, other new additions to Tarragon include Richard Schaffer, who was named managing director in the Ft. Lauderdale development office and Gary Steinfield, who came on board as senior VP with responsibility for broadening the company's development portfolio in the Metropolitan New York area. Jennifer A. Nevitt was added as chief strategist and advises Tarragon on revenue optimization, product design, development, leasing and marketing. Her emphasis is on positioning and marketing new developments from site selection through lease-up or sale. John Scott Kendall joined as a managing director--for-sale housing.
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