Acquisition Loan in Place for 230-Unit Suburban Dallas M-F
- Jun 27, 2013
It may seem that lenders only go for the easy deals these days, but the acquisition financing that Beech Street Capital just closed for The Place at Park Timbers, a 230-unit multi-family asset in Lewisville, Texas, proves otherwise. Beech Street originated a Fannie Mae conventional loan for the borrower, a partnership organized by Allmark Properties, in a deal that presented its share of challenges.
Park Timbers, located roughly 20 miles outside of Dallas, welcomed its first residents to its address of 1902 S. Hwy 121, in 1985. The 14-building, garden-style apartment community was renovated in 1996 and in 2010, came under the ownership of MC Cos. At the time, the property was 88 percent occupied; today, the occupancy level is in the upper 90-percent range.
Allmark got a few surprises in the buying process. Results of a survey indicated that, unbeknownst to the seller, a segment of one of Park Timbers’ parking lots was not under the seller’s ownership. Beech Street stepped in and worked with Allmark, the seller and the surveyor to incorporate the parcel. And there was more work to be done when it was discovered that the Park Timbers’ flood certificate categorized five of the property’s buildings as being located in a special flood hazard area, thereby requiring pricey, full flood insurance. Again, Beech Street came to the rescue, determining that the structures had been miscategorized.
“In a situation like this, our goal is always to mitigate weakness and emphasize strengths,” Chuck Christensen, a senior vice president with Beech Street, said in a prepared statement. “This borrower made it easy.”
Allmark, with more than 1,000 units in the Lone Star State, has the experience; the company and its partners ponied up a notable down payment; and the majority of the limited partners were repeat investors. In the end, Allmark et al walked away with a loan featuring a favorable interest rate fixed for 10 years.
“The lending community has become more flexible with complicated transactions like Park Timbers,” Christensen told Commercial Property Executive. “Lenders have to be more creative and add value on difficult transactions. Our clients view us as a partner and an advisor for these types of transactions.”