Colorado Real Estate Journal -
Three members of the Denver office of Holliday Fenoglio Fowler LP, along with two commercial real estate mortgage bankers from HFF’s Dallas office, recently secured a $44.5 million loan for Lugano Cherry Creek, a 328-unit Class A apartment community in Denver. Eric Tupler, senior managing director of Denver’s HFF office, was part of the team representing the borrower in the transaction along with directors Josh Simon and Brock Cannon of Denver. John Brownlee and Andy Scott from Dallas also were on the HFF team representing a fund managed by Texas-based GenCap Partner Inc. The team secured a two-year adjustable-rate loan through GE Capital Real Estate. “There was a lot of interest” from lenders in refinancing the community, Simon said. “GE Capital was great.” Lugano Cherry Creek is at the northwest corner of East Iliff Avenue and South Emporia Street in the East Cherry Creek submarket. It was constructed by GenCap in 2011. The community includes four story buildings with ground floor retail and structured garage parking. Units include one-, two- and three-bedroom options averaging 1,025 square feet each. Lugano is more than 90 percent occupied. Amenities include courtyards, 1.5 acres of green space, a clubroom with gaming and a lounge area, resort-style swimming pool with a heated sun deck and views of the Rocky Mountains. The two-year financing from GE Capital is a bridge loan. “GE recently ramped up its platform for these types of bridge loans,” Simon said. “Their program is focused on these projects that were recently constructed, but not yet ready for permanent financing. It was very attractive financing.” He said the agencies, Fannie Mae and Freddie Mac, require an apartment to be at least 90 percent occupied for 90 days before it can be stabilized. Now that Lugano is stabilized, it could get the lower rate from GE. Typically, after a bridge loan expires, the borrower will either refinance into a permanent loan or sell it. “The purpose of this loan is to bridge the gap between the periods when they can maximize their strategy,” Simon said. Simon said the location and the quality of the asset helped make Lugano attractive to GE. “The property is a great asset,” he said. “The borrower, GenCap, just did a great job in developing Lugano. That location is very stable and is improving. It is also right down the street from the Cherry Creek Country Club, which is a very high-end residential development.”