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NEWPORT BEACH, CA-A local private investor has closed on a large apartment portfolio refinancing for just over $100 million. The name of the owner was not released, but Irvine-based firm Sierra Capital Partners Inc. structured the deal, which includes four Orange County properties totaling 826 units.
Trent Brooks, a principal with Sierra Capital, tells GlobeSt.com that the owner took advantage of the refinancing for a number of reasons. "The owner was able to pay off first and second mortgages with a consolidation, he was able to take cash out and was also able to pick up lower rates," Brooks says.
The properties, all located in Orange County, include Casa Del Sol (448 units), the Village at Heritage Place (291 units), San Miguel Apartments (62 units) and Seabreeze Gardens (25 units). Brooks and Sierra Capital principal Bryan Frazier structured the loans, which picked up a fixed to float 10 + 1-year term and a 10-year interest only structure.
"The interest only loans are becoming much more common," says Brooks. He says he's seeing three-and-a-half year to 10-year interest only loans. The reasons vary for the deals closing, Brooks adds, as borrowers are making "pre-emptive refinancings."
For this portfolio, Sierra Capital, which is a Freddie Mac program plus seller/servicer, worked with Freddie Mac to close on the loans 26 business days after rate lock.
Brooks says for Sierra Capital, typical deals range from $7.5 million to $25 million, though the Casa Del Sol deal topped $53 million. The average size deal for the firm is roughly $16 million.
Sierra Capital formed in 2003 and the firm eyes deals in five western states: California, Nevada, Arizona, Oregon and Washington. Brooks says he's seeing more action in Arizona, relative to the past, as it's the most active of the states outside of California. "Portland has firmed up as well, but there's not as much activity in Nevada."
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