The Bascom Group completes $235m refinance of 11-property multifamily portfolio
The Bascom Group has successfully completed a $235 million refinance of an 11-property multifamily portfolio spanning five states.
All of the properties are part of Bascom’s third fully discretionary fund, Bascom Value Added Apartment Investors III.
Most the new loans are interest-only with spreads over LIBOR ranging from 180 bps to 200 bps and interest only periods of 24 months to 36 months. The refinanced properties include The Square Apartments in Downey, Calif.; Camden Village Apartments in Fremont, Calif.; Del Flora Apartments in Redlands, Calif.; Courtyard on 68th Apartments in San Diego; Juniper Terrace Apartments in Escondido, Calif.; Southtown at Main Apartments in Santa Ana, Calif.; 52nd Marketplace in Arvada, Colo.; Prescott Lakes Senior Apartments in Prescott, Ariz.; McKinney Orchid Apartments in McKinney, Texas; Fifty 101 and Lyric Apartments, both in Las Vegas.
Five loans were provided by Comerica Bank, two from Silvergate Bank, and one loan each from TCF Bank, New York Life, Citizens Business Bank, and Texas Capital Bank. The refinance produced more than $39 million in additional loan proceeds, a 76 bp reduction in overall interest rate spreads, and 16 percent decrease in portfolio debt-service payments.
“Overall, the refinances have dramatically improved the debt structure for our entire portfolio,” said Chad Sanderson, Bascom’s senior principal. “Over that past seven months, we have seen a tremendous shift in the capital markets. Both interest rate spreads and the indices have moved dramatically lower. This change allowed us to cash out a significant portion of equity, yet still improve our projected cash-on-cash returns.”
Lee Nguyen, senior vice president operations for Bascom, added, “In addition to preserving several key current lender relationships, the recent refinances have provided us with several new lending relationships that we look forward to strengthening over the long-term. Additionally, with the debt portion of the capital stack addressed, we can direct our attention to our constant goal of improving operations and sourcing new acquisitions.”
