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Category ArchiveAcore Capital

ACORE Lends $97M for JV Purchase of NJ Corporate Center

ACORE Capital provided $97 million to a joint venture of Rubenstein Partners and Vision Real Estate Partners (VREP) to facilitate the acquisition and capitalization of the Morris Corporate Center East & West in Parsippany, N.J., Commercial Observer can exclusively report.

Terms of the financing weren’t disclosed. The loan went towards the acquisition of one of the adjoined office buildings as well as to fund capital improvements aimed at adding amenities and attracting and leasing future tenants at the location.

The financing was arranged by Newmark Knight Frank’s Jordan Roeschlaub and Dustin Stolly, vice chairmen and co-heads of the firm’s debt and structured finance division, along with Managing Director Nick Scribani, sources told CO. NKF declined to comment on the transaction.

morriscorpcenter credit nkf 2 ACORE Lends $97M for JV Purchase of NJ Corporate Center
Entrance to Morris Corporate Center IV. Courtesy: Newmark Knight Frank

“Morris Corporate IV is the newest and highest quality asset within Morris Corporate Center. The superiority of the property, coupled with Rubenstein and Vision’s track record with office repositioning strategies, made this a great lending opportunity for ACORE,” ACORE Managing Director Jason Hernandez told CO. “ We are confident that we have best-in-class local sponsorship and a thoughtful, well-capitalized business plan to make the property the premier option for tenants (both large and small) in the market.”

NKF—out of it’s New Jersey office—also represented Intercontinental Real Estate Corporation and Ivy Realty in the sale of the property, which is also referred to as “Morris Corporate Center IV phase two.” Intercontinental and Ivy first purchased the building from MetLife in 2015, Globe Street reported in January.

Rubenstein and Vision purchased the other building in the assemblage—called “Morris Corporate Center IV phase one”—from SJP Properties, which is the original developer of the buildings, and Northwestern Mutual earlier this year. Cushman & Wakefield brokered the deal for the sellers and announced the transaction on February 28.

Built in 2000, according to the campus’ website, the two four-story office buildings are a combined 702,707 square feet and are situated at 389 & 399 Interpace Parkway within the Morris Corporate Center campus. The buildings are connected by a large, glass atrium lobby. “Morris Corporate Center IV phase one” is currently 71 percent occupied by four tenants, including U.K.-based Reckitt Benckiser and New Jersey-based management services company Skanska USA Building, Inc., according to information from C&W.

A spokeswoman for Rubenstein Partners did not immediately return a request for comment. Vision Real Estate Partners declined to comment on the deal.

Source: commercial

ACORE’s $2.1B Fourth-Quarter Lending Surge…by the Numbers

ACORE Capital originated 30 loans totaling $2.1 billion in loans in the fourth quarter of 2017, making it the busiest quarter in the debt fund’s three-year history. Warren de Haan, ACORE’s head of originations and one of its four co-founders, gave Commercial Observer the exclusive skinny on what drove the surge in activity and which assets kept them busiest. 

Rumblings of the surge began stirring by early summer 2017, de Haan said: “We started seeing an increasing number of borrower requests and better product. So, great real estate with 25 to 30 percent equity in the deal and a story to it—that’s exactly what we do,” de Haan said.

The demand was partly driven by borrowers’ comfort with both the capital markets and the return profile of commercial real estate, de Haan said, as well as ACORE expanding its product offering to address those borrowers’ various requests.

“We have the flexibility to originate loans for our balance sheet [ranging] from lower-leverage, bank-like pricing to higher leverage loans on large, complex transitional commercial real estate transactions across all property types—as well as ground-up construction on a selective basis.”

Office properties received the lion’s share of ACORE’s capital in the fourth quarter, comprising $1.1 billion, or 53 percent, of its lending activity. Transactions included an $80 million refi of 505—a mixed-use luxury tower in downtown Nashville and a $90.8 million refinance of Chicago-based Lincoln Property Company’s 2300 N Street NW—an eight-story office building in Washington, D.C.

Multifamily assets took the second-place spot at $405 million, or 19 percent, of the total. This was slightly unexpected, de Haan said, but new supply in multifamily construction has resulted in increased demand for financing.

“Housing fundamentals have been such that we strongly believe in the long-term trajectory of renters, and the demand from millennials continues to grow. A number of projects are coming to us 40 to 60 percent leased, so while it’s too early to go to Fannie Mae or Freddie Mac [for permanent financing], [the borrower] is coming off a construction loan and needs a bridge loan. We found a very good pocket of opportunity to go and do a bunch of those [loans].”

ACORE’s fourth quarter multifamily activity included a $48.8 million loan to New York-based Novel Property Ventures and Atlas Real Estate Partners for the acquisition and extensive renovation of 300 10th Street South in downtown St. Petersburg, Fla.

Hospitality loans comprised 9.5 percent ($200 million) of ACORE’s lending book in the fourth quarter, followed by student housing and retail loans—landing neck and neck at 6.2 percent.

ACORE’s largest student housing loan of the quarter was a $131.7 first mortgage for the ground-up construction of The Graduate—a 19-story student housing building in San Jose, Calif.

Like every other lender in the industry, ACORE was up against plenty of competition “When we’re competing, we’re competing with two guys, but they’re always different guys. Because of our scale we’re omnipresent—we’re always showing up.”

That said, “The better our competitors are, the better the experience is in the alternative lending space and the better it is for all of us,” de Haan said.

Roughly 34 percent of ACORE’s fourth quarter deals were on the West Coast ($722 million). The Northeast followed with $470 million in transactions (or 22 percent), and the Southeast closely behind it with $380 million (or 18 percent).

ACORE made loans to a number of new clients last quarter, including big institutional names as well as entrepreneurial borrowers newly entering the industry.

“We love backing the people that are taking risks but are smart, good credit people. We’ve been very successful at supporting newer entrants in their new endeavors as entrepreneurs,” de Haan said. “We provide higher leverage for them while they get their equity lined up and we can show up for them on a very short [closing timeline] so they can be competitive when they are buying something.”

In addition to its lending surge, ACORE increased the depth of its asset management team to account for more transitional assets last year, which positions it well for a busy 2018, de Haan said: “We have the capital base, the reputation, the people, the scale, the cost of capital and the products to ensure a solid 2018.”

Source: commercial

ACORE Lends $50M in Alabama Multifamily Refi

Crescent Real Estate, a Fort Worth, Texas-based investment fund, has nabbed a $50 million refinancing from ACORE Capital on a multifamily development in Hoover, Ala., Commercial Observer can exclusively report.

The five-year all-in mortgage knocks out existing debt on the complex, The Park at Hoover, and will fund renovations to the property’s clubhouse, fitness center and 69 residential buildings.

The loan was made on the basis of a property valuation of about $75 million, implying a loan-to-value ratio of 67%, according to a source with direct knowledge of the transaction.

The Park, at 2135 Centennial Drive, is about 10 miles south of downtown Birmingham, a city that has suffered consistent outflows of residents for nearly half a century. (After reaching a peak of 341,000 in the 1960 census, the population has declined in every decade since, down nearly 40 percent to 212,000 in 2010.)

Still, the suburb of Hoover offers apartment dwellers cheap rents and good public education, according to Lance Wright, an ACORE managing director.

“When we were presented with this opportunity, we felt that we knew the market well, and that Hoover was one of the better school districts” in Birmingham’s suburbs, Wright said. “This is going to be a less expensive option in a good school district, with a great sponsor.”

The Park’s tally of more than a thousand units helped ACORE get comfortable with the financing, according to Wright. That volume spreads Crescent’s $50 million debt down to $47,000 per apartment. Eighty-eight percent of apartments are now occupied, a number ACORE hopes Crescent will boost into the low 90s over the loan’s term.

Crescent acquired the complex in 2012. Today, 390-square-foot studios rent for $469 per month, and three-bedrooms of 1,500 square feet go for just under $1,000 a month.

A representative from Crescent did not immediately respond to a request for comment.

Source: commercial

ACORE Lends $49M For Acquisition and Renovation of Florida Multifamily Property

ACORE Capital provided $48.8 million to New York-based firms Novel Property Ventures and Atlas Real Estate Partners for the acquisition and extensive renovation of a multifamily property located at 300 10th Street South in downtown St. Petersburg, Fla., Commercial Observer has learned.

The six-year financing package, which closed on Dec. 20, 2017, includes a first mortgage and mezzanine piece.

 “St. Petersburg historically has consisted of an older population,” ACORE Managing Director Kyle Jeffers told CO. “From 1970 to 1990, the average age dropped from just over 50 years old to just over 40 years old, and today, the average age is 39. It fits the mold of the live, work and play area that’s in higher demand today among the younger generations, which generally results in higher rents.”

The complex, called Urban Style Flats, consists of three towers comprised of 481 rental units and 227,240 square feet of rentable space, according to Jeffers. The three towers are of different sizes—15, 11 and 10 stories—and were constructed separately in the 1970s.

“Generally, we like the Florida markets,” Jeffers said. “We just look for good risk adjusted returns, good sponsors and good real estate with good returns for investors. We hadn’t done anything in St. Petersburg, but from a debt perspective it became an attractive investment.”

Jeffers added: “The play here is that it’s an older building, but there’s a significant value-add opportunity. The sponsor can easily improve the amenity base.”

The property was last renovated in 2011 and also includes 10,000 square feet of commercial space and 483 parking spaces within a parking garage adjacent to the complex. The renovation will upgrade and modernize the bathrooms and kitchens in every rental unit, and the pool, lobby, flooring, windows and landscaping will also be redesigned and upgraded.

Current monthly rents at the complex run from $770 for studios to $1,140 for two-bedroom, two-bathroom units.

This marks the third deal ACORE has closed with Novel in the last 12 months, and it’s the first the firm has worked with Atlas. The largest of the the three deals was in January 2017 when ACORE originated a $112 million financing package for Novel on the purchase of Nob Hill, a 360-unit multifamily property in Roseland, N.J., as CO previously reported.

At the time, Jeffers told CO that ACORE was comfortable lending on Nob Hill because of its location “in a high barrier to entry market with an experienced local operator.”

Officials from both Novel Property Ventures and from Atlas Real Estate Partners did not immediately return requests for comment on the deal.


Source: commercial

ACORE’s De Haan and Fellows Talk Market Drivers and Their Busiest Quarter So Far

ACORE Capital just had the busiest quarter of its three-year history. The nonbank national lender has been closing deals from coast to coast and multiple places in between. In December 2017, those deals included an $80 million refinance of the tallest residential tower in Nashville, Tenn.; a $132 million construction loan for AMCAL Swenson’s The Graduate student housing property in San Jose, Calif.; and a $110 million refinance of Candlebrook Properties’ 251 DEKALB multifamily complex in King of Prussia, Pa. Two of ACORE’s four managing partners, Warren de Haan and Boyd Fellows, took a breather between deal-making to visit Commercial Observer’s offices and give their perspectives on what drove business in 2017 and what lies ahead in 2018.

Commercial Observer: How was 2017 for ACORE from a transaction volume perspective?

Boyd Fellows: One interesting thing about 2017 was the lack of transaction activity in the first quarter, which, in retrospect, there was good reason for. In my mind, it was a combination of two factors: the uncertainty post-election as people tried to assess what the real implications of [President Donald] Trump’s election would be and the bid-offer gap, which began in late 2016, where sellers were still expecting ever-higher prices for their properties and buyers were taking a pause to decide whether they were comfortable with those higher prices. As the election was digested, that gap closed, and the uncertainty around the election and around price then went away. In the fourth quarter of 2017, there was a lot of activity.

Warren de Haan: The broader investment sales market slowed down in the first two quarters. If new acquisitions are down then, by virtue of that, [financing] transaction volume is going to be low. Coming into the fourth quarter, we saw our pipeline volume start to increase as transaction volume picked up, especially with our core clients. That was coupled with our perception that we were getting very good risk-adjusted returns at different parts of the capital stack—we’re very active in deploying money in transactions that are high-quality deals. So the combination of [available] capital and increased transaction activity resulted in the best quarter so far in the life of ACORE.

Fellows: During the fourth quarter we signed up approximately 30 loans for over $2 billion. While it’s a lot of work, it’s also exciting as all of these loans are deepening our relationships with a broader array of clients.

Do you think the fears around the economy have dissipated?

De Haan: We’re in an interesting spot where we’ve seen the stock market increase—it’s been on a tear, an upward trajectory. A few things are driving that. Obviously, there’s an anticipation that tax reform is done in a positive way for the economy. Second, there’s an anticipation that there will be an infrastructure spend, and third, there are not a lot of places to put your money. So, I would have thought that would mean another push of optimism in commercial real estate. I would have thought transaction volumes would have gone up significantly and values would have followed. However, the vast majority of our clients who are asset allocators and investors in commercial real estate have a very measured view. They are being conservative and very thoughtful, and they’re not expecting big spikes like we see in the public equity markets.

Fellows: I think underlying that caution is rates. If rates rise, that will have a direct impact on the value of commercial real estate, as the cost of debt associated with real estate will  go up. It also theoretically means that cap rates widen, and you have that element combined with a pretty broad consensus that real estate is very fully valued. It wouldn’t take a big increase in rates to do some damage in the real estate space.

How much would rates have to rise to have an impact?

Fellows: If they rise 10 to 20 basis points, it won’t matter much. If they rise 100 basis points, it will matter quite a bit. So the real answer is somewhere in the middle—somewhere around 50 basis points we’re going to start to feel it. It’s late in the cycle, and nobody thinks rates are going down; they’re going up—it’s just a question of how much. As a result, a lot of real estate capital is going into the value-add space where you can create value in assets. And that is the space [ACORE is] entirely focused on. So, part of the story of why the value-add space is so active right now is that it’s hard for real estate capital to achieve return targets in other categories of real estate.

De Haan: One of the benefits of what is happening right now also is, if you take floating-rate financing, LIBOR is up fairly significantly but spreads have compressed. So the cost of borrowing is still very attractive. One thing we all have to look out for in 2018 is that a number of sellers have looked at the investment sales market to trade their assets but they aren’t getting the prices they want, so they’re looking to the debt markets to get as much leverage as they can to finance themselves out of their position.

So you’re expecting a lot of refis in 2018?

De Haan: I’d say there is a healthy debate among lenders about the refinancing wave that we expect to see in 2018, but there are going to be a number of higher-leverage requests where borrowers or sponsors who were going to sell have now said, “You know what, the debt markets are hot. I should recapitalize and take as much money out as I possibly can.”

Was there such a thing as a typical transaction for ACORE in 2017?

De Haan: In 2017 we broadened the spectrum of ACORE’s lending capability. In the fourth quarter we were extremely effective at financing assets that had more cash flow and less transition but where the borrowers required a lower interest rate. We can lend on everything from strong cash-flowing, light-transitional assets all the way through to empty office buildings and ground-up construction. So our ability to service a client base—everywhere from the low-leverage stuff all the way through highly complex construction projects—is the take away for 2017.

During a recent CO panel, ACORE Managing Director Tony Fineman estimated that construction loans make up around 20 to 25 percent of your lending book. Do you expect that amount to increase or decrease in 2018?

De Haan: That’s on the higher side of what we do, but we think that construction lending for the right sponsor in the right location, and the right business plan represents incredibly good risk-adjusted returns. So we’re willing to do it, and we like to do it, but we’re very focused on what [a loan] means for our entire portfolio. We turn down a lot of loans, but when we find one that we believe in 100 percent and we can get paid for the risk, that’s when we step in.

With the increased competition for deals, how are you keeping your competitive edge?

De Haan: I think competition is healthy, and we have the highest degree of respect for all of our competitors. We know them very well, we’ve worked together over the past 25 years, and it’s very uncommon to see one of our competitors take abnormal risk from a credit perspective. From time to time, we see competitors—and they may see us—doing a deal that we really want to do that’s tighter than we would want to do it from a pricing perspective. But that doesn’t represent a lot of risk to the system. The risk to the system is lenders who are pushing the credit curve, but none of our competitors are right now, and borrowers are still borrowing conservatively.

So borrowers are playing a role in the market discipline?

Fellows: Our average loan-to-value is in the high 60s, and it’s not necessarily because we decide that—it’s the borrowers who decide how much leverage they want. So when we target high-quality business plans with well-capitalized opportunity funds they happen to not want much more leverage than that. It’s partially driven by the fact that it’s difficult to raise money for strategies that require more leverage because investors have said, “Hey, we’re not going to give you money to go borrow 80-plus percent and run the risk that it all blows up.” This is a fantastic fundamental environment for us.

The other side of this equation that I find fascinating—and it’s a stark contrast to the CMBS business—is that when we and most of our competitors make a loan we have to get our money back from that building and that borrower. We’re not selling the loan to get out of a problem; it’s our risk, our reputation, our track record, and it has to come back from that property. In the CMBS business, someone is making a CMBS loan and they know that 90 days later that loan is gone. However in the transitional CRE debt space most of our competitors are in the same position, so the way we compete is typically not with credit. There are other debt shops who focus on higher-leverage loans and there are borrowers who want higher leverage. It’s just not our focus.  

In terms of the capital stack, where do you prefer to play?

De Haan: The best way to describe it is that we are the ideal lender for someone who wants a one-stop-shop solution that may or may not include a mezzanine tranche in the stack. Our average LTV is in the high 60s, but we do some 75s, 76s, 65s, 60s, and there may be some mezzanine embedded in that. We’re a one-stop-shop solution where a borrower says, “It’s a complicated business plan. I need to know that they will keep the loan and asset manage the loan as opposed to selling a bunch of pieces of the loan.” In certain circumstances we will sell a senior participation in the loan, but we still retain control of the loan.

Fellows: There is an oligopoly of five to 10 nonbank lenders. Now that Mesa West was acquired by Morgan Stanley, we are the only independent debt fund with a pure play in transitional real estate lending, and there are two dimensions to that. First, we’re not part of a giant organization, and that allows us to focus. Second, every other player in the market is aligned with, or part of, an equity shop. We’re just a lender, and that’s an advantage. Roughly 10 to 15 percent of our business comes from borrowers who say they’re not showing that deal to anyone who is part of an equity shop.

Anything you’re keeping a close eye on as we begin 2018?

De Haan: We are keeping our eyes on the hotel industry at this late part of the cycle. We are a big lender in hospitality, but we pick our spots. New supply is the thing that can really hurt you. There are markets that are oversupplied, and we’ll stay away from them in every asset class. We take a rifle-shot approach to the different markets and to the different assets. And while we may not love a particular market, that doesn’t mean that that we won’t finance the best building in that market, or a building at the right basis.

Are there any markets on your radar that you’d like to lend more in?

De Haan: I’d like to do more in Seattle and Portland. Portland demographically is one of the strongest markets in the country; it’s supply constrained, it has a good downtown, a low cost of living and a high level of in-migration of population between the ages of 25 and 35.


Source: commercial

ACORE, LaSalle Provide $105M Refi for Nashville’s Tallest Residential Tower

Nashville, Tenn.-based developer Giarratana has secured a $105 million refinance for 505— a mixed-use luxury tower in downtown Nashville, Commercial Observer has learned. ACORE Capital provided a $80 million first mortgage, while LaSalle Property Fund provided a $25 million mezzanine piece.

JLL Chicago’s David Hendrickson brokered the 60-month loan, which refinances a $93.9 million construction loan from Bank of the Ozarks as well as previous $37.6 million mezzanine loan from LaSalle Property Fund.

The 45-story, 550-unit luxury skyscraper at 505 Church Street is Nashville’s tallest residential tower at 543 feet tall. Its amenities include a salt water swimming pool, a tennis court, a fire-pit lounge, a bocce ball court and a dog park.

The upper 16 floors of the building house 193 condos, while the lower 29 floors contain 350 apartments. The property also includes one acre of amenity areas and 10,000 square feet of retail.

ACORE and LaSalle’s refinance is specifically for 505’s low-rise apartment component. Arkansas-based Simmons Bank is financing the high-rise condo component with a $40 million loan. Tony Giarratana, the founder and president of Giarratana, told CO that he expects to sell all 193 condos in the first quarter.

Giarratana has owned the property since 1993 and built several residential towers around the site since then. “Pre-recession, I had planned to build a 70-story tower at the site, but the great recession scuttled those plans,” Giarratana told CO.  He revived 505’s development plans in 2013 to include a 60-story residential and retail tower. The plans were approved but financing was only available for a 45-story tower at the time. “We would have been happier at 60 but we’re thrilled at 45,” he said.

Giarratana decided to refinance the property’s construction loan early as his previous loan agreement did not allow for the sale of condos. The construction loan was set to mature in Dec. 2018 but had two one-year renewal options. A lock-out was in place until Dec. 2, 2017 and the refinance closed on Dec. 15.

Today, 505 is the tallest residential tower in Nashville, and it would be the tallest overall if it weren’t for the antennas on the city’s AT&T building.

“This was a complicated deal because of the condo element, which was not part of the collateral,” Lance Wright, a managing director at ACORE, told CO. “We moved quickly over the holidays to get it closed but this deal really checked all the boxes: a top-notch, local sponsor, best-in-class trophy building with everything a resident could ask for and more, one of the hottest markets in the U.S. from an employment growth and population growth standpoint. It’s a great property.”

A spokeswoman for LaSalle did not immediately return a request for comment.


Source: commercial

ACORE Provides $110M Refi for Candlebrook’s King of Prussia Multifamily Complex

Meridian Capital Group has negotiated $110 million in balance sheet financing for Candlebrook Properties251 DEKALBa five-building luxury multifamily complex in King of Prussia, Pa., Commercial Observer has learned.  

ACORE Capital provided the 36-month loan, which features a rate of 275 basis points over 30-day LIBOR and full term, interest-only payments. The financing takes out a Wells Fargo construction loan, which was set to mature in November but included a one-year extension option. 

251 DEKALB is a five-building, 641-unit property located at 251 West Dekalb Pike. The multifamily complex sits on 26 acres of land at the highest point in King of Prussia. Its amenities include an Olympic size swimming pool and sun deck, a fitness center, a private club room, a game room, sports amenities and a business center.

“We weren’t intending on refinancing the property at this time because we felt we still had time under our construction loan and we felt  there was more expansion in the market for growth in our rental rates,” Josh Levy, a managing director at Candlebrook, told CO. “But as we approached the end of the year we thought it wasn’t a terrible time to be refinancing, given the uncertainty in the financial markets and what’s likely to be a run up in rates.”

Speed of execution was an important factor in the selection of ACORE as lender, Levy said: “ACORE had a fantastic product and were able to close in 30 days. They really understood the asset and were so able to underwrite it quickly, and their terms were extremely competitive and flexible. It allowed us to refinance the property, take out some of the equity we’d invested and refund it to our investors and also create flexibility for future refinancingsif and when we see the rent growth that we’re expecting on the asset.”

Meridian’s Abe Hirsch, Ronnie Levine and Akiva Friend arranged the debt.

“We were thrilled with Meridian’s guidance and ability to execute in an extraordinarily compressed timeframe during a generally difficult time of year, given the holidays,” Neil Rubler, the president of Candlebrook, said in prepared remarks.

“The quality and location of 251 DEKALB dominated our conversations with lenders when we brought this transaction to market and allowed us to achieve a very efficient 36-month loan for this exceptional asset,” Hirsch said.

Candlebrook acquired the property for $70 million in 2014 in partnership with Lubert-Adler of Philadelphia, according to the Philadelphia Business Journal. The development firm then undertook an extensive renovation of the buildingformerly known as The Marquiswith the intention of restoring some of its former glory. Constructed in the 1960s, The Marquis had fallen into a state of severe disrepair before Candlebrook acquired it and renovated building systems, common areas and apartment units.

“It was in really terrible condition,” Levy said. “We had to empty out all the units and redo everything in the building. We spent about $60 million on the renovation of the property in order to bring it to modern standards. We tried to bring it back to the roots of the history of its architecture.”

west buildings ACORE Provides $110M Refi for Candlebrook’s King of Prussia Multifamily Complex
The West Buildings of 251 DEKALB. Photo: Candlebrook Properties

Construction of 251 DEKALB was completed in the summer of 2017 and Candlebrook is currently in the process of finalizing amenitization packages for the property, which is 70 percent leased.

The property is Candlebrook’s first in the area. Once a sleepy, suburban market that didn’t have any Class-A multifamily properties, the area has transformed with several companies moving their headquarters to the area and subsequently boosting the population, Levy said: “We were excited about the building because it had wonderful bones and it’s very hard to find a high-rise building in an affluent suburban community that isn’t in such bad condition that you can really reimagine it. So, it was an exciting project to begin with, but the continued growth of the Philadelphia market and the expansion of the Philadelphia suburbs also presented an exciting opportunity for us to expand our business into.”

Officials at ACORE weren’t immediately available for comment.

 

 

 

 


Source: commercial

ACORE Provides $132M Construction Loan for Cali Student Housing Property

ACORE Capital has closed a $131.7 first mortgage for the ground-up construction of The Graduate—a 19-story student housing building in San Jose, Calif., Commercial Observer can first report.

The loan, which has a 60-month term and closed on Dec. 8, was made to AMCAL Swenson, a joint venture of San Jose-based development firm Swenson and Los Angeles-based residential developer AMCAL Equities. The financing was arranged by Alison Company.

The Class-A, L-shaped property at 90 East San Carlos Street will sit on a 1.45-acre site located one block from the main entrance to San Jose State University. In addition to housing 1,039 students across 260 furnished apartments in its top 17 floors, the building will include 14,750 square feet of retail space, a four-level parking garage, an amenity deck and a pool.

The Graduate is located between the San Jose State University campus and San Jose’s SoFA District—the principal arts and entertainment area, stretching along South First Street between San Carlos and Reed Streets.

“The Graduate will serve as a significant bridge between campus and the SoFA District as well as the surrounding urban amenities of downtown,” Case Swenson, the president of Swenson, said in an announcement at the time of the project’s groundbreaking in October. Its construction is expected to be completed in 2020.

It’s been a busy year for ACORE Capital with the nonbank lender closing deals from coast to coast. In September, it closed a $63 million loan to Dr. Kiran Patel for the acquisition and renovation of Cheyenne Mountain Resort in Colorado Springs, Colo., as well as a $73.4 million financing for the redevelopment of 163 Varick Street in New York City. A month earlier, it provided a $121 million loan—which included a senior loan and a mezzanine portion—to developer Sterling Bay for its purchase of a vacant building in Chicago’s West Loop area.

AMCAL and ACORE officials weren’t available for comment by press time.


Source: commercial

ACORE Lends $63M on Colorado Mountain Resort

ACORE Capital has provided a $63 million loan to Dr. Kiran Patel for the acquisition and renovation of Cheyenne Mountain Resort in Colorado Springs, Colo., Commercial Observer can first report.

Patel, a Tampa, Fla.-based investor with expertise in hotel acquisitions, purchased the property last week for $74 million from an entity controlled by Massachusetts Mutual Life Insurance Co., according to Colorado Springs Gazette.

The acquisition and renovation financing was arranged by KDG Capital. It includes a first mortgage and mezzanine loan and has a five-year term.

Cheyenne Mountain Resort, currently being rebranded as a Dolce Hotel and Resorts property, is located at 3225 Broadmoor Valley Road. Designed for active travelers, the 316-room resort provides access to all-season hiking, a tennis court and golf course. It also includes 40,000 square feet of meeting and event space.

ACORE has been an active lender of late. Last month it provided $121 million in financing to Chicago-based developer Sterling Bay to purchase and revamp a vacant office building in the Windy City’s West Loop area. Like the Cheyenne Mountain Resort deal, the financing included both a senior and mezz. loan.

Patel could not immediately be reached for comment.


Source: commercial