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SAN FRANCISCO-AvalonBay Communities, the managing partner behind the second phase of an urban multifamily development here known as Avalon at Mission Bay has paid off $85 million of construction debt with a new $105-million financing, according to the lender, New York City-based Centerline Holding Co., which is also an equity investor in the project. The borrowing entity, MVP I LLC, is 25% owned by AvalonBay, a locally based apartment REIT, according to SEC filings.
Mission Bay is a 303-acre former rail yard between San Francisco Bay and Interstate 280 that was slated for redevelopment a decade ago and is now a thriving mixed-use neighborhood. Avalon at Mission Bay is a 563-unit development that includes three commercial spaces and a parking garage.
The first phase of Avalon Bay, comprising 250 apartment units and approximately 7,800 sf of commercial retail space, was finished in 2002. The second phase consists of a 17-story high-rise tower and an eight-story mid-rise building that house 313 apartment units, three commercial spaces and a parking garage.
The latest addition consists of studio, one- and two-bedroom units ranging in size from 432 sf to 1,778 sf. Rents start at $1,986 per month. Common area amenities include a landscaped spa and deck area, sport court with a climbing wall facility and a state-of-the-art fitness center. In-unit amenities include walk-in closets, floor-to-ceiling glass windows, granite counter tops and private balconies in select units.
MVP I LLC used $94 million in construction financing to complete the $122-million second phase, according to SEC filings. Center line provided $17.7 million of equity for the second phase through Centerline Urban Capital, its equity investment fund partnership with the California Public Employees Retirement System.
To pay off the construction debt, which had been paid down to approximately $85 million by the end of the third quarter, Centerline provided a seven-year, fixed-rate $105-million first mortgage through Freddie Mac's Premier Lease-Up Program. The program was specifically designed to take out construction loans on properties currently in lease-up.
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