Colorado Real Estate Journal - December 7, 2016
First National Denver has provided $49 million in financing to Denver-based Pauls for the development of the Laurel Cherry Creek, a 71-unit, luxury condominium tower in Cherry Creek North. Pauls, formerly known as the Pauls Corp., was founded by Bill Pauls, who formerly owned the Denver Technological Center. In 1979, Pauls and two partners acquired the Denver Tech Center. Soon after, they created a partnership to own the tech center with London-based European Ferries, a shipping company. In 1989, Pauls stepped down as CEO of the tech center partnership and launched his namesake company. His first order of business was to acquire 1,200 acres near the Denver International Airport, which he called Gateway Business Park. Pauls and partners have developed more than 10 million square feet of buildings nationwide. The strength and stature of Pauls made First Bank of Denver eager to put together a finance deal for Pauls on the Laurel Cherry Creek at 155 Steele St. “First and foremost, it was the sponsorship,” said Dave Lederhos, a vice president at First Bank of Denver. “Pauls is one of the premier real estate investors, owners and developers, not only in Denver and in the region, but in the country,” Lederhos said. In addition, he believes that Pauls is developing the right product at the right time in the right place. “I think it has an A-plus sponsorship and an A-plus location that just happens to be six blocks from our office,” Lederhos said. He said Pauls has been patiently waiting to bring the right development to that key site. “It has been in the works, at some level, for going on a decade,” he said. This marks First Bank of Denver’s first deal with Pauls. However, it has experience with Haselden Construction, the general contractor for Laurel Cherry Creek. “Haselden has a great deal of experience in the Cherry Creek market – they built Steele Creek (the luxury apartment tower at 3222 E. First Ave.), for example,” he said. “We know they build a quality building in a timely manner,” Lederhos said. “We also believe there is a real dearth of luxury for-sale product, especially in a hot market like Cherry Creek,” Lederhos said. “The few that have been built have done very well,” he noted. Presales are expected to begin next summer. The deal with Pauls is so complex that First Bank of Denver bought in about a half-dozen other banks to participate in the loan. “For confidentiality reasons I can’t say who the other banks are but, generally, they are small- to medium-sized local and regional banks,” Lederhos said. Brian Pauls, executive managing director and treasurer at Pauls, said that First National Denver is an ideal banking partner for Laurel Cherry Creek. “First National Denver has a proven record of tailoring loans to meet the specific needs of construction projects in the Denver marketplace and leading a collaborative process,” said Brian Pauls, who also is the son of Bill Pauls. “The First National team understood the complexities of the project and was able to structure a tailored loan strategy to fit our needs for this development,” he said. Pauls chose First National Denver based on its expertise in the Cherry Creek marketplace and its local lending capabilities. “Helping our clients secure the loan facilities they need to be successful is paramount to our commercial real estate team’s success and integration into the local business climate,” Lederhos said. “We live and work in this area, so our team is highly tuned in to the local business environment and recognized the opportunity this deal presented,” he said. Other News Denver-based Brock Yaffe, an associate director at HFF, assisted in the securing of a $103 million Freddie Mac loan for the $129 million purchase of the 959-unit Pembrooke on the Green apartment community by Oak Coast Properties. Charles Hallady and Lee Redmond, based in HFF’s Newport Beach, California, office, also were part of the team that arranged the financing. “Freddie Mac stepped up in a big way as usual, financing a property that fits their mission goals pertaining to affordability and green enhancements, as well as their streamlined ability to execute rate locks at a moment’s notice,” Hallady said. MetroGroup Realty Finance, a private commercial mortgage banking firm based in Newport Beach, California, has restructured the debt on an office building in Centennial. MetroGroup arranged a $20.3 million loan on behalf of the Dornin Investment Group for Highland Place, a Class A, 138,771-square-foot building near Interstate 25 and C-470.