MINNEAPOLIS—Oak Grove Capital recently secured $27 million in Fannie Mae loans for Oak Residential Partners' acquisition of Stratford Woods Apartments, a 297-unit market-rate development in suburban Minnetonka. The garden-style complex has 10 buildings, each containing four floors. The St. Paul-based Oak Grove frequently works with Oak Residential to secure acquisition financing for multifamily properties, especially ones that need fresh capital.
As reported in GlobeSt.com, for example, Oak Grove recently secured $23.2 million in loans for Oak Residential's acquisition of Pine Tree Club Apartments and Westbrooke Village Apartments, two market-rate apartment communities in St. Louis that need major capital improvements.
“Stratford Woods represents the ideal and classic value-add story,” says Rick Wise, principal at Oak Residential Partners. “The property sits in an ideal location in one of Minneapolis' strongest submarkets, yet was underperforming in the market and in need of fresh capital and fresh thinking. Oak Residential brought forward a plan to reposition the property and worked with its management and financial partners to communicate their vision.”
The transaction, including a loan underwriting and closing process, took only 45 days to complete. The fixed-rate loan has a 10-year term with four years of interest-only, seven years of yield maintenance and provides much needed cash flow in its early years, officials say.
“Scott Streiff and the team at Oak Grove Capital have proven to be excellent partners in executing our vision,” says Adam Levine, principal at Oak Residential. “As a result, the loan's favorable financing terms and structure allow Oak Residential to execute its business plan, which calls for significant value enhancement of the asset through strategic investment of capital throughout the property.”
The loan closed late last year and was the companies' third deal in 2014.
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
