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COLORADO REAL ESTATE JOURNAL
— October 21-November 3, 2015
Finance
by John Rebchook
Eric Tupler and Josh Simon
of the Denver office of Holliday
Fenoglio Fowler LP recently
arranged $70.6 million in loans
for two different borrowers in
separate transactions.
In the largest transaction, they
arranged $41.8 million in financ-
ing for Del Arte Lofts and Flats,
a 351-unit multihousing commu-
nity at 151 Joliet Circle in Aurora.
The other deal totaled $28.8
million for the refinancing of five
apartment properties owned by
Denver-based RedPeak Proper-
ties.
On the bigger of the two deals,
Tupler and Simon worked on
behalf of the borrower, Advenir
Inc., which purchased the Del
Arte from Wood Partners for $52
million.
Tupler and Simon placed the
seven-year, 2.28 percent, adjust-
able-rate loan with three years’
interest only with Freddie Mac’s
CME Program.
The securitized loan will be ser-
viced by HFF through its Fred-
die Mac Program Plus Seller/
Servicer program.
“It provided them the flex-
ibility to hold it for the seven-
year loan term or, basically, sell
it before the seven years and pay
only a 1 percent prepayment pen-
alty,” Simon said.
Advenir will rebrand the prop-
erty as Advenir at Del Arte and
will implement a minor capital
improvement program to achieve
greater rental premiums.
Although a government agen-
cy, Freddie Mac looks at market-
rate deals such as this much like a
private lender, Simon said.
“They are real estate people,”
Simon said.
Freddie Mac likes the location
near Lowry and the Anschutz
Medical Campus, he said.
It also liked the strength of
Advenir, a Florida-based opera-
tor, he said.
The loan was attractive to
Advenir because of its low rate,
flexibility and it is a high-loan-to-
leveraged deal.
“Freddie Mac has some pretty
outlined programs,” Simon said.
Life insurance companies also
offer attractive financing options,
but they tend to prefer lower-lev-
eraged deals of 60 percent to 65
percent loan-to-value, “while this
is an 80 percent LTV,” Simon said.
“Every deal is very borrower
specific and it depends on their
profile,”whether theywant agen-
cy financing or private financing,
he said.
“There certainly are ones who
are focused on agency financing
andwhowant tomaximize lever-
age to maximize their returns,
while others will take lower
leverage to mitigate some of their
risks in deals,” Simon said.
For those putting more equity
in the deals, life insurance com-
panies sometimes can be a better
fit, he said.
In the other deal, Tupler and
Simon secured $28.8 million in
financing with a total of 220 units
owned by RedPeak in and near
Capitol Hill.
“HFF provided broad market
coverage to ensure that we met
our investment objectives,” said
Bobby Hutchinson, investment
director for RedPeak.
“The process was seamless
and provided us with several
attractive options to consider,”
Hutchinson said.
Although the lender wasn’t
released, records show it was
JPMorgan Chase.
The properties and loan
amounts include:
• The 86-unit 1000 Grant (the
former Burnsley Hotel), $12.2
million;
• The 43-unit 929 Marion, $4.45
million;
• The 32-unit 1075 Corona,
$4.55 million;
• The 32-unit 970 Pennsylva-
nia, $4.05 million; and
• The 23-unit apartment com-
munity at 1145-1153 Ogden St.,
$3.62 million.
“These are all great proper-
ties in one of the best apartment
markets in the city,” said John
Winslow, principal of Winslow
Property Consultants LLC.
Winslow,whowasnot involved
in the transaction, added that
Mike Zoellner, president of Red-
Peak, “has a propensity to focus
on the quality buildings with
long-term upside.”
Simon said there was a great
deal of interest in refinancing the
properties from a number of dif-
ferent lenders.
“We had a lot of life compa-
nies, as well as local, regional and
national banks, interested in it,”
he said.
Fannie Mae and Freddie Mac
also would have refinanced the
properties in a heartbeat, he said.
“When it was all said and done,
RedPeak decided to go with this
bank program because of the
terms, the flexibility and other
factors,” Simon said.
Lenders interested in the deal
liked it because of the hot Capi-
tol Hill market, the quality of
the properties and the financial
strength, reputation and experi-
ence of RedPeak, he said.
“There is really not much to not
like about this deal,” Simon said.
“Lenders also liked that it was
five different properties,” he said.
“Even though the loans were not
cross-collateralized, as they were
five individual loans, lenders
took into consideration that they
had a portfolio of five proper-
ties,” which could help mitigate
risk.
RedPeak received a seven-year
loan with a 3.91 percent interest
rate.
RedPeak’s Hutchinson said he
looks forward to working with
HFF in the future, “as we con-
tinue to grow our portfolio.”
Other News
n
Denver-based
JCR Capi-
tal
recently provided a $15.38
million mezzanine loan for the
refinancing of a portfolio of 11
stabilized multifamily properties
in California and Illinois with a
total of 2,509 units. The loan was
made by the JCR Capital Com-
mercial Real Estate Finance Fund
III LP.
s
HFF refinanced the 1000 Grant property for RedPeak Properties.
