fixed-rate-commercial-loanDALLAS, November 15 — Dallas, Texas-based Metropolitan Capital Advisors (MCA), a financial intermediary specializing in the exclusive representation of investors, developers and property owners in the commercial real estate capital markets, has arranged a $10,000,000 Permanent Fixed Rate Commercial Loan for the refinance of the Solaris Apartments – a 422 unit property located in northeast Dallas.

The Borrower purchased the property out of foreclosure in March 2011 and spent over $2mm on common area amenities and unit improvements.  Renovations included, but were not limited to, updating the clubhouse, pool/barbecue and playground areas, landscaping, replacement of wood siding, exterior painting, HVAC system enhancements, replacement of 100% of appliances, new flooring, new window treatments and new hardware throughout units.

In just over 12 months, the Borrower was able to increase collections at the property by more than 50%, while increasing occupancy by 10% and retaining a high percent of the existing residents.  This was accomplished through a combination of the renovation program, a la carte unit upgrades, bad debt reduction, and rental increases.  The Property has averaged is currently 93% occupied. The Solaris, FNA Nueva Vista, was purchased for $7M in March 2011. At purchase, the property occupancy was in the low 80’s, with T12 NOI after replacements of ($20k). Our first full month of operations in April 2011, revenue was $157,500 and NOI was $59k. By March 2012, revenue was in excess of $225k with NOI of $____. In less than 12 months, collections increased by more than 50%, all while moving occupancy up less than 10% and retaining a high percent of the existing residents. This was accomplished through a combination of value added unit improvements, common area amenities, a la carte unit upgrades, bad debt reduction, and aggressive rental increases.The Solaris, FNA Nueva Vista, was purchased for $7M in March 2011. At purchase, the property occupancy was in the low 80’s, with T12 NOI after replacements of ($20k). Our first full month of operations in April 2011, revenue was $157,500 and NOI was $59k. By March 2012, revenue was in excess of $225k with NOI of $____. In less than 12 months, collections increased by more than 50%, all while moving occupancy up less than 10% and retaining a high percent of the existing residents. This was accomplished through a combination of value added unit improvements, common area amenities, a la carte unit upgrades, bad debt reduction, and aggressive rental increases.

Although the property lacked the typical seasoning required in order to maximize refinance proceeds and return borrower equity, the Borrower wanted to lock in a long term interest rate at today’s historical lows and close before year end.  MCA was able to secure a permanent, non-recourse loan at 70% Loan-To-Value at a fixed interest rate for 10 years of 4.32% based on a 25-year amortization.  Proceeds from the loan were used to refinance an existing bridge loan, fund closings costs and return the borrower’s equity capital.  In order to overcome the seasoning issue, maximize proceeds and still close by year end, the loan was structured with an initial advance of $9mm with another $1mm to be released to the borrower once certain hurdles are met.

MCA Senior Director, Brandon Miller, was responsible for arranging the permanent fixed rate mortgage with an CMBS Conduit Lender.

 

Since 1992, Metropolitan Capital Advisors has closed in excess of $8.8 billion of debt and equity transactions. National Real Estate Investor Magazine has consistently ranked MCA as one of the top CRE Financial Intermediaries in the US.   MCA has already closed over $400,000,000 of commercial real estate financing during 2012.