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4/25/08
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Financing of $23.4 mil for Calera Investment Group’s purchase of the 184-unit Brookstone Apartments in Buena Park was arranged by Marcus & Millichap Capital Corporation (MMCC) and provided by Mesa West Capital. It includes more than $12k per unit in capital reserves for repairs and upgrades. The acquisition, which we first reported about a week ago on RENTV, was viewed as a value-add opportunity by Calera.
he property is located at 7400 Artesia Blvd, on the corner of Artesia Blvd and Western Ave, roughly 21 miles southeast of downtown Los Angeles. Calera’s business plan includes renovating the unit interiors through kitchen, bathroom, bedroom and living room upgrades; adding washer/dryers and refrigerators; re-painting the exterior; upgrading the landscaping, pool area, and other common area amenities; upgrading the leasing office; upgrading the resident lounge, installing a new workout room/gym, displaying new signage; and raising the current rent rates to market levels.
Financing for the property was provided at a 5.85 percent fixed interest rate for the first two years, then LIBOR plus 300 basis points for the remainder of the term. The terms of the loan are three years interest-only with a loan-to-value transaction of 67 percent.
Jake Roberts and Anita Paryani of MMCC arranged the financing package for the transaction. “MMCC was able to secure a loan commitment in less than a week when the initial lender’s loan fell through,” says Roberts. “We also secured a two-year fixed-rate loan with the lender’s debt funded day one, and the borrower’s equity funded over time, thus causing a significant increase in the borrower’s internal rate of return.”
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