Mike Myatt, executive managing director of Pacific Security Capital, tells GlobeSt.com that the repositioning plan includes extensive internal and external rehabilitation at the 1450-1460 E. Bell Rd. property in North Phoenix. The Irvine, CA-based firm plans to invest $7 million to renovate the property, also battling a low occupancy.
"The property has a lot of upside and we like the sponsorship," Myatt says. "[The buyer] have a good track record."
Myatt says the borrower originally came to Pacific Security Capital looking for $15 million of equity. "We were able to find a structure that works better for them," he says. "We allowed them to lever up more than they had thought." Pacific Security Capital provided a float to fixed first mortgage with a spread over the 90-day Libor for the property. After the property is stabilized, there is an option to fix the rate.
The property, which was built in phases from 1984 to 1987, was acquired with institutional equity and mezzanine debt. Myatt points out that Pacific Security Capital was able to close the financing in less than 30 days. "It was remarkable to close in this tight timeframe with all these moving pieces," he says. "We had several bodies on the project for days."
Pacific Security Capital and the borrower also are working on another transaction. Real Estate Partners Inc. expects its portfolio to exceed $500 million by the end of 2005.
Tyler Anderson of CB Richard Ellis Inc.'s local office represented Terracina's seller, United Dominion Bank UDR Texas Properties. Dalton Real Estate Co. negotiated for Real Estate Partners Inc.
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