December 2014 – Briefs/Finance

Omega Healthcare, Aviv REIT to Merge in $3B Deal; BofA Provides $71M for L.A. Shopping Center; Dune RE Fund III Closes Oversubscribed at $960M; Colliers Arranges $175M for Massachusetts M-F Community; Magellan JV Lands $80M Miami M-F Construction Loan; CBRE Arranges $158M for Koll in California; Metropolis Investment Holdings Lands $150M for San Francisco Landmark; George Smith Partners Arranges $172M for Complex CRE Portfolio.

Omega Healthcare, Aviv REIT to Merge in $3B Deal

Omega Healthcare Investors Inc. is about to become the largest–and by a wide margin–owner of skilled nursing facilities in the country. The healthcare REIT has agreed to acquire Aviv REIT Inc., a leading owner of post-acute and long-term care SNFs, in an all-stock merger valued at $3 billion. The stock-for-stock transaction will provide Aviv shareholders with 0.90 shares for each share of Aviv common stock, which boils down to $34.97 of Omega stock for each Aviv share. It’s a premier price tag for a premier portfolio; investment banking firm Stifel, Nicolaus & Co. calculates an implied cap rate of 6.7 percent, noting that individual assets can be snapped up for yields of 8 to 10 percent. When all is said and done, Omega will be a $10 billion REIT with 789 SNFs and 85 other healthcare properties.

BofA Provides $71M for L.A. Shopping Center

Lucescu Realty has arranged $71 million in financing for Huntington Oaks Shopping Center in Monrovia, Calif. The investment real estate services firm represented borrower Huntington Oaks Delaware Partners, and procured the lender, Bank of America. The financing package included a $60.5 million senior mortgage and a $10.5 million mezzanine loan, which together replaced a $51 million mortgage from Wachovia Bank. Huntington Oaks Center is a 328,711-square-foot community shopping center anchored by Kohl’s, Trader Joe’s, Toys ‘R’ Us, Marshalls and Bed Bath & Beyond. It was built in 1986 and is currently 98 percent leased.

Dune RE Fund III Closes Oversubscribed at $960M

Dune Real Estate Partners L.P. set an $850 million target for Dune Real Estate Fund III–an investment vehicle focused on distressed, deep value-add opportunities and contrarian investments predominantly in the U.S.–and not only did it hit the target, it surpassed it. Dune completed the closing of Fund III with $960 million in capital commitments. Private fund placement agent Monument Group Inc. worked with Dune on Fund III, which attracted investors that had participated in the two predecessor funds as well as new contributors, and they ran the gamut of the institutional investment community. Participants included public and corporate pension funds, endowments, foundations and high-net-worth families. 

Colliers Arranges $175M for Massachusetts M-F Community

Colliers International has arranged $175 million in financing for Granada Highlands, a 919-unit multi-family community in Malden, Mass. Proceeds will be used to pay off existing debt, complete an existing unit renovation/upgrading strategy, and build out an additional 236 units on site. Colliers’ senior vice president John Broderick and executive vice president Kevin Phelan represented borrower Metropolitan Properties of America to secure the new financing through JP Morgan Chase. The property is located five miles from downtown Boston. Amenities include a fitness center, business center, media room, outdoor pool, basketball courts and tennis courts.

Magellan JV Lands $80M Miami M-F Construction Loan

A joint venture of Chicago’s Magellan Development Group, Midtown Development and an unidentified institutional investor has secured $80 million in construction financing for Midtown 5, a 24-story, 400-unit luxury apartment tower in Midtown Miami. HFF arranged the financing. The lenders were TD Bank and Mercantil Commercebank, of Coral Gables, Fla. To be built at 3201 N.E. 1st Ave., about four miles west of Miami Beach and surrounded by the Wynwood and Edgewater neighborhoods and the Design District, Midtown 5 was designed by Loewenberg Architects, of Chicago, and is slated to be certified LEED Silver.

CBRE Arranges $158M for Koll in California

The Koll Co. has refinanced Airport Business Center, a 1.2 million-square-foot office/flex industrial park in Irvine, Calif., to the tune of $158 million. The real estate company relied on CBRE Group Inc.’s capital markets team to arrange the financing for the Southern California asset, and the commercial real estate services firm found a most willing provider in Brookfield Asset Management. Located in Orange County in Southern California, Airport Business Center has been in the Koll family since day one; the company developed the 68-building property between 1968 and 1979, and has owned and managed it continuously ever since. The business center consists predominantly of 1,000 to 3,000-square-foot incubator spaces that frequently serve as a home for start-up companies in growth mode.

Metropolis Investment Holdings Lands $150M for San Francisco Landmark

JLL’s capital markets team has secured $150 million in refinancing for 345 California Center in San Francisco’s financial district. Cornerstone Advisers (on behalf of MassMutual) provided the loan to an affiliate of Chicago’s Metropolis Investment Holdings Inc. The 48-story, 600,000-square-foot building is the third-tallest in San Francisco, and was completed in 1986. Its top 11 floors, which are at 45-degree angles to the rest of the building, were originally intended as residential condominiums. That space is currently occupied by a luxury hotel, the Mandarin Oriental San Francisco.

George Smith Partners Arranges $172M for Complex CRE Portfolio

It wasn’t easy, but George Smith Partners has pulled off the arrangement of a $172.3 million bridge loan for a troubled 36-property commercial portfolio spanning 17 states. The diverse group of assets includes regional malls, office buildings, industrial properties and mobile home parks. The properties’ locations in secondary and tertiary markets likely didn’t endear the portfolio to lenders. However, there were far bigger challenges with which GSP had to contend on behalf of its client, including litigation, recession-induced loan maturity default, bankruptcy, and a non-negotiable time limit. The list goes on to include issues ranging from ground leases to capital and tenant improvement projects to environmental concerns.