Advanced Real Estate Services, Inc. has refinanced a six-property, 1,223-unit, multi-family portfolio in Southern California with loans from Freddie Mac and Fannie Mae of $ 240.4 million arranged by NorthMarq. The financings resulted in more than $ 100 million in payout proceeds, which will be used as an initial $ 250 million investment in Advanced Fund 20-1 for new multi-family acquisitions.
According to Michael Elmore, executive vice president / managing director of NorthMarq’s Newport Beach, Calif. Office that handled the refinancing transactions, three of the properties are in Orange County, two in Riverside County, and one in Los Angeles County. Elmore said in a prepared statement that Freddie Mac funded the first five assets for $ 204.6 million during the initial phase of the COVID-19 crisis and kept all financial terms without change.
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Pacific Palms Apartment Homes, a two-building, 149-unit building located at 111 W. Orangewood Ave. and 2045 S. Haster St. of Anaheim, Calif., was refinanced with a 10-year interest loan of $ 35.9 million at an interest rate of 2.71 percent from Fannie Mae further in the crisis. According to Elmore, Fannie Mae also upheld all of the terms and conditions and noted that both lenders have long-term relationships with Advanced.
Advanced Real Estate Services was able to secure attractive financing during the height of the pandemic. Richard Julian, the company’s president, attributed this success to his relationships with NorthMarq, Fannie Mae and Freddie Mac. In prepared remarks, he noted that Advanced already has three new properties in escrow that were bought off-market and is aggressively looking for more assets.
All remaining assets were funded through Freddie Mac and received 10-year loans with a term of just five years, followed by a 30-year amortization schedule. The interest rates were 2.84 percent. The assets are:
- The Corona Pointe Resort, a 714-unit property located at 3957 Pierce Street in Riverside, California, has been refinanced with a $ 121 million loan
- Corona Pointe Townhomes, a 63-unit property on Magnolia Ave. 11511 in Riverside, which was refinanced with a $ 14.3 million loan
- The 5800 Apartment Homes, a 149-unit property located at 5800 South St. in Lakewood, Calif., Was refinanced with a $ 35.6 million loan
- Avignon Apartment Homes, a three story building with 88 units at 1361 and 1375 West Valencia Drive and 220 Basque Ave. of Fullerton, Calif., which was refinanced with a $ 19.8 million loan
- Washington Place, a 60-unit property at 1311 E. Washington St. in Santa Ana, California that was refinanced with a $ 14 million loan.
In June 2019, NorthMarq’s Elmore arranged the refinancing of another Advanced Southern California property and secured one Freddie Mac permanent loan of $ 56 million for the Highland Pinetree Apartments with 320 units in Fullerton. The transaction provided net cash outflows of $ 28 million for new acquisitions.
Founded in 1982 and based in Irvine, California, the company uses private equity to fund all of its investments, conduct in-house renovations and property management. The company owns and operates more than 9,000 apartment buildings throughout Southern California.