(Save the date: RealShare Apartments comes to the Westin Bonaventure, Los Angeles, October 24.)
INLAND EMPIRE, CA-GlobeSt.com has exclusively learned that George Smith Partners has arranged $105 million in construction financing for GLJ Partners for two new multifamily developments in the Inland Empire region. The transactions include $52 million for Oak Springs Ranch, a to-be-built 312-unit multifamily property in Wildomar, CA, and $53.7 million for the Paseos, a to-be-built 385-unit multifamily property in Montclair, CA.
As GlobeSt.com previously reported in April, Canyon-Johnson Urban Fund made a $25.7-million equity investment in a joint venture with an affiliate of GLJ Partners for the acquisition and development of a fully entitled 15.4-acre redevelopment site for the Paseos, an infill transit-oriented apartment development. GSP also arranged the equity at the time.
GSP vice president Malcolm Davies was assisted by VP Michelle Lee in the transactions. GLJ Partners will use the money to develop the 385-unit luxury class A apartment community in Montclair and he points out that the land is “shovel-ready for development.” He adds that “While construction lenders in the Inland Empire have not been active in recent years due to the recession, we were able to demonstrate the strength of this local market and the area’s increasingly positive multifamily absorption rates, ultimately identifying a lender who recognized the value in this investment.”
The property is located directly across the street from a major regional mall, the Montclair Plaza, and one block south of the Metro link commuter rail with service to Downtown Los Angeles and Pasadena.
The construction financing was a libor based and interest-only loan underwritten to a 65% loan-to-cost ratio and a 1.2 stabilized debt coverage ratio.
For Oak Springs Ranch, GLJ Partners’ to-be-built class A multifamily community will, upon completion, consist of 312 units across 18 buildings. The land is fully-entitled, permitted and shovel-ready for development.
Davies points out that GLJ has owned the land since 2008, “but had not yet secured construction financing because they had put the project on hold due to the Great Recession.” According to Davies, GLJ Partners worked with a joint venture partner to acquire the land in 2008. The project required at least $52 million of proceeds in order to move forward, he says. “In addition, the client required financing which was guaranteed solely at the entity-level, providing protection to the client’s principals.”
Finding a lender familiar with the area and willing to reinvest was a challenge, Davies explains. One lender placed $35 million in construction debt and the other, Canyon Capital Realty Advisors placed $17 million in mezzanine construction debt financing. “Through a successful inter-creditor negotiation, we were also able to meet all of the client’s requirements, as well as their joint venture equity partners’ requirements for financing,” he adds.
According to Davies, the property is a total of 21 acres, with a density of 15 units per acre, making it the least-dense class A apartment community in the Southwest area of Riverside County. The property is also adjacent to a major-anchored neighborhood shopping center, and is more proximate to employment centers in Riverside and Ontario than other competing residential communities in the corridor.
As GlobeSt.com exclusively reported in early July, Dallas-based Trammell Crow Residential and Carlsbad, CA-based GLJ Partners just have merged and will focus on expanding TCR’s operations in the West. GLJ principals Garth Erdossy, Luke Daniels, and Tony Ditteaux will join TCR along with almost 20 associates in the firm, as GlobeSt.com reported. The newly created entity will operate as Trammell Crow Residential.
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
