Multifamily Finance
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As of June 2014, Beech Street is Capital One Multifamily Finance.

Project Spotlights

Each deal presents its own set of challenges. Learn how Capital One Multifamily Finance exceeds expectations to meet the needs of its customers.

The Right Structure at the Right Time

30 September, 2014

The Challenge

Raintree Partners invests in the kind of apartments that just about anyone would be happy to rent.  The private commercial real estate investment and development company based in Laguna Niguel, California, focuses on multifamily properties in major West Coast markets, with a special emphasis on such upscale and up-and-coming California locales as Carlsbad, Sherman Oaks, and the Mid-Market area of San Francisco.  It’s not unusual to encounter features like walk-in closets and floor-to-ceiling windows in their units while the properties themselves routinely feature amenities like rooftop lounges and Jacuzzi-style tubs. Since its founding in 2007, the firm has acquired more than 20 communities totaling more than 3,200 units including those under development.

Three of its acquisitions fit the mold: Taiko Village in Burbank, Villa Sofia in Sherman Oaks, and Vista Pardiso in Studio City. All three complexes are Class A properties with modern design, high-end finishes, and stainless steel appliances. Each property offers a full amenity package including dishwasher, refrigerator, gas stove, microwave, wood or carpet flooring, and fireplaces. The properties offer an array of one-, two-, and three-bedroom units, including townhome-style units that range up to 2,059 square feet.

Their back-story, however, is somewhat unusual—but consistent with Raintree’s philosophy of applying the appropriate investment strategy as opportunities arise. The three properties had originally been developed as for-sale condominiums.  In 2011 and 2012, Raintree purchased these assets out of bankruptcy and a portfolio of bank-owned REO. Upon acquisition, Raintree completed the remaining construction and began operating the three properties as for-rent condominium communities.  The initial acquisitions were financed with floating-rate bridge debt.  On stabilization, Raintree looked to Capital One Multifamily Finance for take-out financing options. 

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Different Loans for Different Phases

24 June, 2014

The Challenge

Out on the plains east of Boulder, Colorado, M. Timm Development has been constructing Grandview Meadows in stages since 2000.  The company has proceeded deliberately, building only when the economics were right as it worked to create a first-class property with a full range of attractive amenities.  Currently, the multiphase development has 434 units, with a final phase of 80 units scheduled for completion in November 2014. Given its proximity to both the Denver and Boulder markets, occupancy is extremely high.

But the company knew that its tactical approach to construction could prove a liability when it came to securing financing.   “We recognized that phased assets can pose problems for lenders,” says Matt Easter, vice president of Timm.  “Nonetheless, we approach borrowing with the goal that most investors share: we wanted to obtain long-term financing at the lowest possible rate.”

To meet their expectations, Timm needed an originator with a wide breadth of experience and a willingness to think outside the box.  The company found that partner in Chuck Christensen, senior vice president of originations in the Newport Beach, California office of Capital One Multifamily Finance.

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Maximizing Funds with Tailored Financing

31 March, 2014

The Challenge

Sierra Village Apartments met Trion Properties investment criteria almost perfectly.  Trion, a private equity investment company, focuses on value-added and distressed commercial real estate assets with an emphasis on the multifamily sector.  It specializes in properties that require moderate-to-heavy rehabilitation on a 12-24 month investment horizon. 

The 185-unit Sierra Village Apartments, located in the Sacramento MSA, had languished since it had fallen into receivership in 2006.  In 2012, it was included as part of a large $180 million receivership sale in 2012, but it was almost immediately slated for resale.   Although the company that purchased it made some capital improvements to the property, it lacked the local market expertise to maximize the value of its expenditures or a strategy that would justify a more comprehensive renovation plan. 

Trion believed that with more involved day-to-day management, investment in interior and exterior renovations, and aggressive leasing, there would be significant upside value to the acquisition.

Further increasing its attraction to Trion is Sierra Village’s location in an attractive submarket—North Highlands—within an MSA that is on the cusp of better economic times.  Although the Sacramento MSA—the seat of California government—was hit hard by the recession, the state has weathered its budget crisis, and unemployment in the Sacramento MSA has declined 200 basis points over the last year.

To take advantage of this opportunity, though, Trion needed financing structure that would maximize the funds it could invest in the property and give it time to realize the value-added from its improvements. 

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Delivering Cash Flow to Support Value Add Strategy

12 February, 2014

The Challenge

SGI Partners, LLC., a Commercial Real Estate Investment company based out of Santa Ana, California, approached Beech Street Capital to finance the acquisition of The Villages at Lost Creek located in San Antonio, Texas.  A key priority for the borrower was to obtain financing that produced the highest amount of cash flow to enable them to upgrade the 260-unit complex and move it from a B- to A-class property through renovation. 

The borrower also faced some legal complexities to work through that had the potential to impact their timeline, including existing tax-exempt bonds and occupancy restrictions that would remain in place under a Land Use Restriction Agreements (LURA) until 2021. A late hour change in the borrowing structure right before closing also added to the challenge. 

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Capital One Multifamily Finance is distinguished by its ability to structure multifamily mortgages customized to the precise needs of its clients. We are a Fannie Mae DUS® lender, a Freddie Mac lender, and a FHA HUD lender. Plus, we offer balance sheet financing backed by the full strength of Capital One Commercial Banking. You can count on our team of multifamily mortgage makers to deliver apartment financing smoothly, quickly, and with certainty.