The Dana Point, CA-based Optivest has more than doubled its Texas footprint with the $27.4-million acquisition from Freedom Asset Management LLC of Dallas. The just-bought properties are class A and class B Friendly-branded locations at 610 E. Main St. in Allen; West FM 544 in Murphy; 394 E. US Hwy. 80 in Forney; 3800 W. US Hwy. 80 in Terrell; and 4660 Texas 360 in Grand Prairie.
The portfolio, developed between 1997 and 2007, was 66% occupied at sale time, according to David A. Cohen, Northeast regional director for GE's North America Lending Division office in New York City. He says the respective markets are averaging 85% occupancies.
[IMGCAP(2)]"They really saw an opportunity in these properties because they were under performing," Cohen tells GlobeSt.com. "It was really a value-added play for them, which worked perfectly with our program."
In a 46-day turn from application to closing, Optivest secured its first GE loan, tapping into a flexible fixed-rate finance program. Cohen says the loan has a make-whole provision after an 18-month lock and short yield-maintenance period. By basing it on a "Treasury to Treasury" rate versus "Treasury to spread," Cohen says it essentially creates "a much cheaper way to prepay" than defeasance. Optivest's debt terms includes partial collateral releases should it decide to sell pieces of the real estate.
"We understand Optivest's strategy," Cohen says, pointing out that GE's one-time ownership of Storage USA blazed the trail for the lender's interest in the product type. "This is a type of transaction that fits our model--short-term, on book, value creation."
Just recently, Cohen closed a $40-million deal for a five-property portfolio in the New York City MSA for Acadia Realty Trust of White Plains, NY. "With our expertise, it makes it easy for us to understand the risk and evaluate the portfolio in this area," he adds.
Optivest's portfolio contains 13,100 units and 1.8 million sf of commercial storage space. Its Texas portfolio includes self-storage properties in Dallas, Round Rock, Wylie and Killeen. Charles E. Mills, owner of CEM Capital Financial Services in San Juan Capistrano, CA, was the deal's mortgage banker.
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