Meridian, Beech Street Arrange $90M in Financing for M-F Portfolio in Orange County, Calif.

By Barbra Murray, Contributing Editor

Greg Reed & Kristen Croxton, of Beech Street Capital

Sometimes, two is better than one. Real estate finance and advisory firm Meridian Capital Group L.L.C. joined forces with mortgage banking company Beech Street Capital L.L.C. to better position themselves for arranging refinancing featuring a no cost forward rate lock at application for a 982-unit multi-family portfolio in Orange County, Calif. The two have emerged victorious, meeting the borrower’s needs with $90.4 million in loans from a life insurance company lender.

The borrower was in a hurry to capitalize on low interest rates and willing to give a little–approximately $10 million of prepayment penalty–to get a lot.

“The sponsor wanted to put these assets to rest prior to the existing loans coming due, and was comfortable paying the prepayment penalties because the low-rate environment allowed for what he believed was a once-in-a-lifetime opportunity to lock in 25-year debt in the mid-4 percent range,” Meridian Capital Group Managing Director, Seth Grossman told Commercial Property Executive.

Grossman, along with Greg Reed and Kristen Croxton, executive vice presidents with Beech Street, negotiated the transactions.

Meridian and Beech Street’s client was laser-focused. “The borrower was most interested in the 25-year term with 25 years of amortization that allowed them to lock this up for the long run,” Croxton added.

The five-property portfolio is located in the cities of La Habra, Fullerton, Anaheim, Costa Mesa, and Buena Park and had more than a few features that attracted lenders to the financing opportunity. As Reed noted, the magnets included long-term ownership of 30-plus years by the original owner, which developed the properties, well-located assets and a very strong in-house management platform. And there was more; despite having been developed in the 1970s, the properties are in tip-top shape.

“They have been extremely well maintained with heavy capital spent regularly as needed from a sponsor that does not cut corners and puts quality first,” Grossman concluded. “That is evident in the fact that all have been consistently 95-plus percent occupied; 100 percent occupied, regularly.”