400-Unit M-F Asset in Hawaii Gets $59M in Financing

The Bascom Group and Morgan Stanley Real Estate Investing have landed approximately $59 million for the refinancing of Oasis at Waipahu, a 406-unit apartment property in Waipahu, on the island of Oahu, Hawaii.

Oasis at Waipahu - 2The Bascom Group L.L.C. and Morgan Stanley Real Estate Investing have landed approximately $59.3 million for the refinancing of Oasis at Waipahu, a 406-unit apartment property in Waipahu, on the island of Oahu, Hawaii. Mesa West Capital L.L.C. came through with first mortgage debt for the joint venture.

Mesa West was attracted to the transaction for a few reasons. “The property type and the quality of sponsorship were big drivers,” Jason Bressler, the associate with Mesa West who originated the financing, told Commercial Property Executive.

Occupying an 18-acre site roughly 16 miles outside of downtown Honolulu, Oasis is a 48-year-old gated apartment community that has been kept in prime shape over the years, having most recently undergone significant renovations in 2008 and 2009.

And it’s evident why the sponsorship played a role in Mesa West’s decision to provide financing; Bascom and MSREI are reputable players in the real estate industry and Bascom has a decade-long history with the property. Bascom, whose ownership position at Oasis has included various partners over the years, announced in March 2012 that it had acquired the property in a $73.5 million acquisition that, at the time, marked the largest multi-family transaction in the State of Hawaii since 2007. Bascom had secured a $56 million, 36-month, floating-rate loan with Prime Finance just months before the purchase.

There’s much more at Oasis that caught the eye of Mesa West. “A lack of available supply also contributed to the decision,” Bressler said. “New product is very expensive to build in Hawaii. The property also was not on a ground lease, which is also rare in Hawaii.”

It didn’t hurt that Oasis has maintained a consistently high occupancy level over the years; at the time of its last refinancing, its occupancy level was 97 percent. And there’s no end in sight to the call for apartment accommodations in the area. “Tourism is up on the island, however Oasis is primarily workforce housing and the military is a major demand driver for multi-family,” Bressler added.

Bascom and MSREI have already invested in upgrades at Oasis and are currently planning more makeovers.