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DALLAS-With speed of the essence, Crow Holdings pulled off a $158-million portfolio purchase from Aurora, CO-based Pauls Corp. with a 30-day due diligence and 15-day close. When the dust settled, the buyer had made the simultaneous close with three non cross-collateralized loans based more on future rental return from 1,331 units in Texas and Colorado than historical track records.
The CBRE/Melody team put the deal before a half dozen of Crow's lineup of life company lenders known for flexibility and closing speed. The Hartford, CT-based Cigna Realty Investors came out on top. "Cigna wanted the business badly. They locked the rate on a phone call," Mike Riccio, senior director in CBRE/Melody's Hartford office, tells GlobeSt.com. "They hadn't even finished their underwriting."
Riccio says the "very competitive" pricing delivered a $110.9-million loan with a 10-year term, a fixed rate and an interest-only component for part of the shelf life. The financing closed at a 70% loan-to-value ratio, the highest leverage that the Crow Holdings Realty Partners IV LP fund will entertain.
The largest piece of the triple play was a $42.8-million loan for the Crest at Lone Tree, a 90%-plus leased mix of 400 apartments and 9,500 sf of retail space. The three-year-old property, developed by Carmel Properties, sits at 10047 Park Meadows Dr., right on the doorstep of a light-rail station at Lincoln Avenue, which is slated to open in the fall. Riccio and CBRE/Melody's Mike Easter in Denver structured the deal.
The next costliest takedown was the 90%-leased, 437-unit Estates at Memorial Heights at 616 Memorial Heights Dr., which accounted for $38.3 million of the total funding. Riccio teamed with Tom Fish and Holly Minter in CBRE/Melody's Houston office.
The 494-unit Preserve at Rolling Oaks at 15450 FM 1325 added $28.9 million to the financing total. Riccio and CBRE/Melody's Tracy Kennedy in Austin teamed to work out financing for a 95%-leased development, which was the seller's inroad in Texas. The complex, positioned on 39 acres, was built in 2001 by the San Diego-based Fairfield Residential.
Riccio says the hurdles to overcome were the timing for closing the deal and the funding request given the concessions that are in place. "It's an aggressive purchase. Some lenders couldn't get to the proceeds that they were requesting," he says. "But, all three properties have phenomenal locations and each is at the top of their respective markets. Cigna was able to underwrite future income as opposed to looking at the historicals."
Pauls still owns the Canyons at 2751 River Park in Fort Worth and Quarry Townhomes at 250 Treeline Park in San Antonio, but it couldn't be learned by press time if they too are up for sale. Neither the seller nor the buyer is discussing the deal beyond what was in Crow's latest press release about the portfolio pickup.
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