Tuesday, August 1, 2017

Passco Companies Sells 270-Unit Multifamily Community in Phoenix Submarket for $36 Million; Generates 170.5 Percent Return to Investors

Ovation at Tempe Apartments, Tempe, AZ

Bill Passo
                TEMPE, AZ –  Passco Companies, LLC, a privately held Calif.-based real estate company that specializes in the investment, acquisition, development and management of commercial properties throughout the U.S., along with its JV-partner, InSite Property Ventures, has sold Ovation at Tempe, a 270-unit multifamily community in the Phoenix submarket of Tempe, Arizona for $36 million.

The JV partnership initially acquired the asset for $25.85 million in 2014 and sold it for $36 million three years later, according to Passco’s Founder and CEO, Bill Passo.

“We recognized that there was a tremendous opportunity to create value and capitalize on the ongoing growth throughout the Phoenix Metro, which is exactly what we did,” says Passo.

 “When we initially acquired the property, the region was in proven recovery with plenty of runway left for growth in terms of both value and rents. In fact, rents in the Phoenix Metro have increased by 5.6 percent over the past year alone, which is attracting significant investor interest to the region.”

Bill Passo
Passo explains that the firm’s ability to recognize the deep value potential of this market early in the recovery cycle allowed them to sell the asset for a premium price, ultimately achieving a 170.5 percent return to investors.

            During ownership, the JV partnership implemented a series of interior and exterior improvements to the apartment community including upgrading unit interiors, constructing additional carports and enhancing the property’s exterior and community amenities. 

“This was a strong value-add opportunity for our firm,” says Belden Brown, Senior Vice President and National Sales Manager at Passco Companies who also notes that the firm is actively seeking value-add opportunities throughout the U.S. “By renovating and updating the property, we were able to optimize the asset and significantly drive value in a very short period of time.” 

 Michael Sun, Founder of InSite Properties, LLC adds, “These capital improvements also provided the opportunity to significantly increase rental and ancillary income, as well as position the asset for long-term rent appreciation. This made the property very attractive to investment groups, allowing us to achieve an IRR of approximately 21-22 percent.”

Ovation at Tempe is a very unique apartment community that features one- and two-bedroom apartment units, as well as separate casitas and townhomes situated on approximately 16 acres.

Michael Sun
“The property has one of the lowest unit densities in Tempe and is strategically located in close proximity to retail, entertainment, employment hubs, and education centers,” says Mark Forrester, Senior Managing Director at commercial real estate firm Berkadia, which completed the sale on behalf of the JV partnership, in addition to arranging the financing.

 “Passco and InSite Property Ventures’ value-add strategy truly positioned the asset for long-term growth and filled a void in the local market for high-quality Class A product.”       

The property is located at 4502-4505 S. Hardy Drive in the city of Tempe, Arizona.

Berkadia’s Phoenix team of Mark Forrester, Senior Managing Director, Ric Holway, Senior Managing Director, and Dan Cheyne, Senior Director, represented the seller, while Berkadia’s Managing Director Jackson Cloak of the firm’s Irvine office arranged the $27 million in financing through Freddie Mac.

For a complete copy of the company’s news release, please contact:

Lauren Burgos/ Lexi Astfalk
Brower, Miller & Cole
(949) 955-7940

Meridian Capital Group Arranges $21.7 Million in Ground-Up Construction Financing for Meyers Group’s Avery Place at Pompano Multifamily Development in Pompano Beach, FL

;Noam Kaminetzky
Boca Raton, FL – Meridian Capital Group, America’s most active dealmaker, arranged $21.7 million in ground-up construction financing for the development of the Avery Place at Pompano multifamily property in Pompano Beach, FL, on behalf of the Meyers Group.

The three-year construction loan, provided by a balance sheet lender, features a floating rate of 3.50% over 30-day LIBOR, full-term interest-only payments and two one-year extension options.

 This transaction was negotiated by Meridian Managing Director, Noam Kaminetzky, who is based in Meridian’s Boca Raton, FL office and Senior Vice President, Sam Grunberger, who is based in Meridian’s Iselin, NJ office. 

Avery Place at Pompano, located at 225 North Federal Highway, is situated in a prime location right off of Federal Highway in Pompano Beach. The Meyers Group had the opportunity to purchase the land adjacent to an existing parking garage that will provide parking for future tenants.

Sam Grunberger
Upon completion, the 163,000 square foot property will be an eight-story class-A multifamily property, with 145 luxury rental units and an attached garage. 

Amenities will include a multi-function room, billiards and media room, a fitness center including a yoga room, lushly landscaped pool and garden area with grilling stations, cabanas, a waterfall, and a fire pit.

“Despite construction loans becoming increasingly more difficult to come by in this market, Meridian was able to leverage its relationship with a balance sheet lender to secure financing for this exceptional project,” said Mr. Kaminetzky.

“In collaboration between Meridian’s Florida and New Jersey offices, we were able to successfully facilitate the closing,” said Mr. Grunberger. “It was a pleasure and an honor to work with The Meyers Group, a very prominent and successful developer and operator of multifamily properties,” he added. “I look forward to seeing Avery Place at Pompano completed, as I am confident that it will become a stunning asset.”

For a complete copy of the company’s news release, please contact:

Jonathan Stern
Meridian Capital Group


NAI Realvest Completes $1.1 Million Sale to Habitat for Humanity on Silver Star Road in Orlando, FL


Michael Heidrich
Orlando, FL  -- NAI Realvest recently negotiated the sale of a 16,158 square foot industrial building at 4116 Silver Star Rd. in Orlando for $1,100,000.00.  

Michael Heidrich, principal at NAI Realvest, negotiated the transaction representing the seller, LC Realty Associates, LLC. 

Habitat for Humanity of Greater Orlando, Inc. purchased the property after leasing it more than 4-1/2 years.    Jason Schrago of Newmark, Grubb, Knight, Frank represented the buyer in the transaction. 

For a complete copy of the company’s news release, please contact:

Larry Vershel or Beth Payan, Larry Vershel Communications 407-644-4142 lvershelco@aol.com

George Smith Partners Secures Acquisition Bridge Financing for Celebrity Condo Conversion in West Hollywood, CA

Patio del Moro Apartments, West Hollywood, CA

LOS ANGELES, CA (July 31, 2017) – Commercial real estate investment banking firm George Smith Partners has successfully secured bridge financing for the acquisition and condominium conversion of Patio del Moro, a seven-unit, courtyard-style apartment community in the West Hollywood submarket of Los Angeles.

 The financing was arranged by George Smith Partners Vice President Zachary Streit.

                Built in 1926 by renowned architects Arthur and Nina Zwebell, Patio del Moro is a historically-designated and architecturally-significant property that was once home to some of the most prominent celebrities in Hollywood history, including Charlie Chaplin, Paulette Goddard, Joan Fontaine, Humphrey Bogart, and Suzanne Pleshette.

Patio del Mar

            “This condo conversion is one of the first to take place in West Hollywood since the Recession, a sign that condos are making a comeback in Los Angeles,” explains Streit.

“The property’s historic significance, coupled with its irreplaceable urban-infill location, presented an attractive investment opportunity to capitalize on the demand for housing in West Hollywood. This deal reflects a renewed investor interest in for-sale residences, as well as strong lender appetite for condos in this market.”

Zachary Streit
            The sponsor, Brian Friedman investing through his family office Friedman Capital, is a private equity, venture capitalist, and commercial real estate investor developer who has been involved in the conversion and sale of more than 1,000 condominium units over the last 20 years.

He founded Friedman Capital in 2008, and is also the founder and managing partner of Foxhall Partners in Washington DC. Brian purchased this property with his older brother Jay, who has been a resident of Hollywood for decades.

Upon acquisition, the sponsor plans to renovate the property and apply for a Mills Act Tax Abatement, which provides economic incentives for the restoration and preservation of historic buildings by private owners.

            “Despite this asset’s prime location and unique investment potential, the challenge was getting lenders comfortable with the sponsor’s conversion strategy,” notes Streit. “Given the property’s historic landmark status and limited on-site parking, negotiating the condo mapping and release provisions would be difficult and would require an extensive set of approvals.”

Streit continues, “To address and resolve these concerns, we focused on demonstrating the sponsor’s proven track record of successful condo conversions and the pent-up demand for residences in West Hollywood. Our ability to source an attractive bridge loan to finance this deal is a testament to our market expertise, as well as the strength of our capital relationships.”

Paulette Goddard

Located just one block south of the Sunset Strip, in close proximity to a plethora of high-end restaurants, retailers, and music venues, Patio del Moro is situated in the heart of West Hollywood, a supply-constrained, high-demand Los Angeles submarket.

In recent years, West Hollywood has emerged as one of the most walkable, amenity-rich neighborhoods in Los Angeles, according to Streit. Notable attractions include entertainment venues such as the Roxy Theatre and The Troubadour; boutique hotels such as The Standard; The Pacific Design Center; film, television, and music production studios; and much more.

Brian Friedman
“West Hollywood is at the epicenter of the ongoing cultural revitalization in Los Angeles, and truly embodies the live/work/play lifestyle that today’s residents are demanding,” says Brian Friedman, Founder of Friedman Capital family office and Managing Partner of Foxhall Partners. “Patio del Moro’s proximity to nearby amenities, coupled with its historic character and old Hollywood charm, makes it well-positioned to cater to the demand for housing in this market.”

Designed in the Spanish Revival courtyard style with distinct Moorish features, Patio del Moro offers average unit sizes of 1,425 square feet, which are larger than average for this submarket, and includes a mix of mostly two- and three-bedroom units.

George Smith Partners secured the $4.5 million loan from a bank with a national lending platform. Sized to 65% of cost, the bridge loan is interest only and floats at prime plus 0.5%.

The property is located at 8225-8237 Fountain Avenue in West Hollywood, California.

For a complete copy of the company’s news release, please contact:

Miki (Conant) Akil / Katie Kea
Brower, Miller & Cole
(949) 955-7940