Mesa West Capital continues its wave of multifamily origination activity funding $187.5 million in first mortgage debt secured by communities in Chicago, IL; Phoenix, AZ and Portland, OR.  

In the largest of the three separate financings, the Los Angeles-based debt fund manager and portfolio lender provided a joint venture between Chicago developer JDL, Harlem Irving Companies and funds managed by an institutional real estate manager, with an $85.2 million loan to refinance Eight Eleven Uptown, a 27-story luxury residential tower in Chicago’s Uptown neighborhood.  Brought to market in 2019 by JDL, the property located at 811 W. Agatite Avenue includes 273 multifamily units made up of studio, one-, two- and three-bedroom floorplans and eight fully leased townhomes.  Peter Rubi Fresh Produce has leased 21,000 of the 30,000 square feet of street-level retail space to operate an on-site grocery, which will open later this year.  

“Leasing velocity at the property was brisk prior to the onset of the pandemic,” said Mesa West Capital Executive Director Matthew Sndyer, who originated the four-year, floating rate financing out of the private lender’s Chicago office.  “The property has seen significant leasing traction since COVID restrictions have been eased.” 

Mesa West Capital also provided a $49.35 million first mortgage loan to real estate development and investment firm Holland Partner Group to refinance Kado Apartments, a recently completed 199-unit apartment development in the Slabtown neighborhood of Northwest Portland.  The seven-story residential building at 1378 NW 18th Avenue, features a mix of floor plans ranging from studios to three-bedroom apartment homes.   In addition to taking out the existing construction loan, proceeds from the five-year, floating rate loan will be used by the sponsor to stabilize the property, which was 85 percent occupied at loan closing.  Additionally, the sponsor will convert a portion of the existing street level retail space into three additional live/work units.   

Josh Westerberg, a Director in the Mesa West Capital San Francisco office who originated the financing, explained: “The Northwest Portland submarket is a central commuter suburb that has experienced rapid development over the last decade. Slabtown in particular is well-located, with many residents either working in the neighborhood or commuting to adjacent Downtown Portland for work via public transit. While Northwest Portland provides great accessibility to the Downtown Portland core, many notable companies including Legacy Health, Adidas and WebMD also operate directly within the submarket.”

Mesa West Capital also provided an affiliate of Sares Regis Group with $53 million in first mortgage debt for the acquisition and repositioning of Level at Sixteenth, a 240-unit apartment property in Phoenix, AZ. As part of its investment strategy, Sares Regis plans to complete an extensive remodel of the property which -- was built in 2010 -- including renovations to the exterior and common areas in addition to interior upgrades to the property’s studio, one- and two-bedroom units. 

“While in good condition, the property is of slightly older vintage than that of its surrounding competitive set,” said Mesa West Capital Vice President Danielle Duenas who led the origination team.  “Our financing enables the Sponsor to implement a capital improvement plan and reposition the asset to compete favorably with newer product, ultimately realizing a net increase in rents. The property also benefits from its proximity to strong submarkets including the Camelback Corridor and Midtown.” 

The financings are the most recent examples of how debt funds are adding to the increased liquidity for multifamily assets, particularly those with strong sponsorship, according to Principal Ronnie Gul. 

“While the segment has fared well, it is still a market-by-market and asset-by-asset decision,” said Gul. “Capital is readily available to those sponsors who have successfully navigated the difficult period of increased concessions, rental and credit loss.  As concessions start to burn off and fundamentals improve, we will continue to place a heavy emphasis on multifamily assets in markets exhibiting strong job and population growth.”

The financings follow Mesa West Capital’s $40 million loan last month to finance the acquisition of a 309-unit apartment community in Austin.  Over the past 24 months Mesa West Capital has originated more than $300 million of loans  across seven multifamily assets in the Austin Metro alone. 

Mesa West Capital has originated $40 million in first mortgage debt to finance the off-market acquisition of a 309-unit apartment complex in Austin, TX.  The buyer is Texas-based SPI Advisory. 

The five-year, floating rate loan is secured a Class A multifamily asset called Elan Parkside that is located within Highland, a large-scale redevelopment of a shuttered regional mall now under construction in central Austin. The Highland redevelopment is currently expected to include 1,200 residential units, 200 hotel rooms, 800,000 square feet of commercial office space, and 1.3 million square feet of academic space for a new central campus for Austin Community College. 

Located at 609 Clayton Lane, Elan Parkside, was developed in 2017 by the seller and was the first apartment complex in the Highland redevelopment district.  The six-story property features a mix of studio, one- and two-bedroom floorplans and approximately 5,500 square feet of ground level retail space.    Common area amenities include a four-level parking garage, swimming pool, aquatic plaza, 24-hour fitness center, outdoor courtyard with fireplaces and fountains, two-level clubhouse with a business center, bike storage, and an outdoor kitchen.  The property was 97 percent leased at closing. 

The financing is part of a wave of origination activity on multifamily assets for Mesa West Capital.  Over the past 24 months Mesa West Capital has originated more than $300 million on multifamily across seven assets in the Austin Metro.

“While the pandemic has introduced some instability to the Austin apartment market similar to many other metro areas, we believe the MSA is still poised to be a long-term winner,” said Mesa West Capital Vice President Brian Hirsh who led the origination team out of the private portfolio lender’s Chicago office.  “Elan Parkside’s desirable central Austin location and institutional asset quality make it a great addition to our growing Texas loan portfolio”

Andy Scott and Michael Cosby in the Dallas office of JLL Capital Markets Americas, arranged the financing. 

Mesa West Capital has provided Austin, TX-based real estate investment firm Wildhorn Capital with $33.5 million in short-term, first mortgage debt for the acquisition of a 284-unit multifamily community in Austin, TX.

The five-year, floating rate loan is secured by Patten East, a low-density garden-style community located in the southeast Austin submarket of East Riverside, three miles from the city’s central business district.  While the property has been well maintained by the seller, Greensboro, NC-based Hawthorne Residential Partners, Patten East represents an attractive value-add opportunity in one of the fastest growing rental markets in Austin, according to Vice President Brian Hirsh who led the origination team out of Mesa West Capital’s Chicago office.

“The story is similar to other major markets around the United States experiencing strong population and job growth, in which renters are being priced out of some of the core urban locations and seek more affordable submarkets,” said Hirsh.   “However, unlike many other major metros, East Riverside is an affordable submarket in very close proximity to the CBD, creating robust demand for well-maintained, well-operated rental communities.”

Located at 2239 Cromwell Circle, the property also is less than one mile from Oracle’s new 550,000-square-foot Waterfront Campus.  The first major office development on the Southeast Waterfront, Oracle’s new campus is credited with transforming the Riverside submarket as a new business hub.   Other nearby employers include Google, Facebook, Cirrus Logic and Silicon Laboratories.   Approximately 178,000 people work within a five-mile radius of Patten East

Patten East features a mix of one- and two-bedroom apartment homes in 19 low-rise residential buildings on a 12-acre site.   Community amenities include a clubhouse with resident lounge and Starbucks coffee bar, 24-hour fitness center, saltwater swimming pool, outdoor kitchen and fireplace, and dog park.  

Wildhorn Capital, whose current portfolio consists of 1,570 multifamily units located primarily in Austin and San Antonio, plans to make improvements to building interiors, common areas and unit interiors upon rollover.  

Financing was arranged by Newmark Knight Frank out of Austin.

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Mesa West Capital has provided Newport Beach, CA-based real estate development and investment firm Sares Regis Group with $65 million in first mortgage debt for the acquisition of a 169-unit multifamily community in Los Angeles’ Mid-Wilshire neighborhood.

Mesa West Capital’s five-year, floating-rating loan is secured by The Preston, a four-story, high-density community located at 630 Masselin Avenue. The property features a mix of studio, one- and two-bedroom floorplans, and also includes a 336-car parking garage with EV parking stations, pet park, resort-style pool and clubhouse with fitness center.

Situated one-half block north of Wilshire Boulevard, between Fairfax and La Brea Avenues, in what is commonly referred to as The Miracle Mile, the neighborhood benefits from a vibrant social and cultural infrastructure with 1.2 million square feet of retail, entertainment and dining options, as well as Los Angeles’ largest collection of museums. Los Angeles’s famed “Museum Row” includes the Los Angeles County Museum of Art, the La Brea Tar Pits and Museum, the Craft Contemporary and the Petersen Automotive Museum.  Additionally, the Academy Museum of Motion Pictures at Fairfax and Wilshire will open in December 2020.    

The Preston is also within walking distance of two future subway stations along the Metro Rail’s Purple Line extension.  When completed in 2023,  both the Fairfax and La Brea Metro stations will offer access to downtown Los Angeles. Phase 2 and 3 of the expansion, due to open in 2025 and 2027, respectively, will extend the line west to Beverly Hills, Century City and Westwood.  

Sares Regis Group will immediately begin a multi-million-dollar capital improvement campaign focusing on exterior, common area and amenity upgrades to create a more contemporary aesthetic.  The plan also includes renovations to apartment interiors as units roll. 

The origination team was led by Mesa West Capital Director Joshua Westerberg out of the private lender’s San Francisco office.The financing was arranged by Jesse Weber and Scott Williams with CBRE out of its San Francisco office.

Mesa West Capital has provided the joint venture of Rise Properties Trust and  Cigna Investment Management with $52 million in first mortgage debt for the acquisition and repositioning of a 131-Unit community in Seattle, WA 

The five-year, non-recourse financing is secured by Joseph Arnold Lofts, a 12-story apartment building located at 62 Cedar Street in Seattle’s Belltown neighborhood, one block from the redeveloping Seattle waterfront.  The property is within walking distance to Pike Place Market, the Seattle Center and the popular 2nd Avenue retail district. 

Built in 2013 “The Joe,” features a mix of studio, one- and two-bedroom apartment homes with condo quality finishes.  The development’s concrete and steel construction provides for floor-to-ceiling windows and ceiling heights up to 13 feet.   The amenity-rich property includes a studio apartment guest suite, fitness center, business center, tenant lounge and rooftop deck with barbecues, fire pit and outdoor seating areas.

While in excellent condition, the sponsor will undertake a moderate renovation program as units roll.  The bulk of the improvements will be focused on the common areas which  will include upgrading the existing fitness center, rooftop deck enhancements, upgrades to the resident lounge/game room,  improvements to the lobby and common areas, and adding new landscaping to improve the overall resident experience.

“Joseph Arnold Lofts is a unique, top quality apartment building in a very desirable neighborhood in downtown Seattle. The sponsor’s planned improvements will enhance the resident experience and ensure the Property remains competitive as a top-tier apartment project in the market for years to come,” said Mesa West Capital Director Joshua Westerberg who originated the financing and runs the firm’s San Francisco office.  “By self-managing the property and leveraging their local expertise in the market, we believe the sponsor will be able to achieve significant operational savings and optimize occupancy,” said Westerberg. 

Rise, a private, open-ended Canadian REIT, focuses on multifamily investment in the Pacific Northwest.  Through Thrive, its property management arm, Rise manages nearly 3,000 multifamily units in the Seattle area.