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Category ArchiveMesa West Capital

Sterling Bay Seals $48M Bridge Loan for Talbott Hotel in Chicago

Mesa West Capital has finalized a $48 million bridge loan to refinance debt on the Talbott Hotel in Chicago, according to an announcement from the lender.

Sterling Bay, one of the Second City’s biggest developers and the organization behind office space in Chicago for Google, McDonald’s and Starbucks, bought the late-1920s structure in 2015 for $50 million and wrapped up an extensive remodeling of the property in the first half of last year. The five-year mortgage, which includes $7 million in mezzanine debt that Mesa West placed with another organization it declined to identify, will help fund the hotel while it gets re-established following the reconfiguration.

The four-star boutique hotel, at 20 East Delaware Place, houses 178 rooms and a 2,200-square-foot retail space on its ground floor that currently hosts a branch of the Danish food chain Joe and the Juice. On the southern edge of the Gold Coast neighborhood, the hotel is just blocks from the Michigan Avenue retail drag—as well as rivals like a Westin, a Park Hyatt and a Drake.

“At this part of the cycle, there is a little bit of oversupply,” admitted Matthew Snyder, who led Mesa West’s financing team for the deal. “That’s why some of the hotels are going the short-term bridge route as some of these markets continue to work through the supply. But you are seeing favorable traction, in terms of tourism year over year continually growing.”

The recent $20 million renovation emphasized a refreshed in-room design palette, with the installation of more modern light fixtures, marble window sills and new furniture. Joie de Vivre, the hospitality group that manages the Talbott, also rearranged the lobby, shifting the location of the check-in desk and adding cozier seating.

Representatives for Sterling Bay and Joie de Vivre didn’t respond to requests for comment.

Source: commercial

Mesa West Originates $165M Refi of Two San Diego Apartment Buildings

Mesa West Capital has originated $165 million for San Diego-based Sunroad Enterprises to refinance two San Diego, Calif. luxury rental complexes, Mesa West announced today.

The five-year, non-recourse and first-mortgage financing was split into two pieces, with Mesa West keeping a $145 million A-note and New York-based investment manager Clarion Partners keeping the remaining $20 million on its books, according to a news release from Mesa West. The deal closed December 19.

“With Clarion, we had a conversation with the borrower to bring in a partner, and leverage was important to the borrower,” Mesa West Vice President Jason Bressler, who told Commercial Observer. “We identified Clarion as being active in multifamily in Southern California. HFF really helped us figure out the parameters borrower was looking for, and Clarion was a natural fit to get the execution the borrower wanted.”

ariva apts courtesy mesa west capital Mesa West Originates $165M Refi of Two San Diego Apartment Buildings
Ariva Apartments at 4855 Ariva Way in San Diego. Courtesy: Mesa West Capital

The debt is backed by Ariva Apartments and Vive on the Park, located at 4855 Ariva Way and 8725 Ariva Court, respectively, in Kearny Mesa, a suburb of San Diego.         

“We continue to be bullish on multifamily,” Bressler said. “It’s an asset class, in whole, that’s always going to bounce back very quickly. These properties are brand new and are very high quality and what each benefits from is they are in a central location with certain demand drivers.”

Ariva Apartments is comprised of 253 rental units within two four-story buildings. Construction was completed in 2014 and the building was fully occupied within 16 months of opening, according to a press release from Mesa West. The complex includes a cardio and strength playground and assigned, underground parking.

Monthly rents for Ariva range from $1,815 for 595-square-foot studios to $2,700 for a 1,241-square-foot, two-bedroom pad, according to the property’s website.

The seven-story Vive on the Park was constructed June 2017 and is home to 302 units. Amenities include a pool and spa, a fitness center with multiple stories, rooftop lounges with barbeque pits, social areas with sand fire pits, a business center, a clubroom, a game room, a social club and on-site dry cleaning.

Monthly rents at Vive on the Park range from $1,835 for a 546-square-foot studio to $3,530 for a 1,409-square-foot, three-bedroom apartment.

“The sponsor has done an excellent job in leveraging the portfolio’s quality finishes, high-end and diverse amenity offerings and central Kearny Mesa location in the lease up of these two projects in a very competitive market,” Mesa West Principal Steve Fried, who led the origination team with Bressler, said in prepared remarks. “We are confident in their ability to maintain the strong leasing velocity to meet the demand for this type of product in one of the most rapidly developing pockets in San Diego County.”

Ariva Apartments and Vive on the Park are the two most recent residential developments for Sunroad’s planned 40-acre community called Sunroad Centrum, which will surround the nearby Centrum Park and will be included as part of the Spectrum Technology Center—the redevelopment of the former 232-acre General Dynamics aerospace facility—in Kearny Mesa. Once completed, Sunroad Centrum will include 1,622 multifamily units and approximately 856,000 square feet of commercial office space, according to the release.

HFF Senior Managing Directors Tim Wright and Aldon Cole—out of the firm’s San Diego office—arranged the financing. Wright and Cole did not immediately respond to a request for comment. Sunroad Enterprises could not immediately be reached.


Source: commercial

Mesa West Lends $43M on Arizona Office Park Purchase

Equus Capital Partners and iStar have nabbed $43 million in financing from Mesa West Capital to acquire an office complex in Scottsdale, Ariz., according to an announcement by the lender.

RAIT Financial Trust, a New York-based real estate investment trust, sold the property, McDowell Mountain Business Park, to the joint venture for just over $53 million.

The complex’s two identical buildings stand at 16425 and 16552 North Pima Road, near the northeast vertex of Arizona State Route 101—a beltway that encircles Phoenix’s suburbs from the west to the city’s southeast. That location makes the property convenient for executives and junior employees alike, according to Jason Bressler, a vice president at Mesa West.

“This office is well located because it’s got a Scottsdale address,” Bressler told Commercial Observer. “Your decision-makers are living in the Northeast Valley, and so the people who are deciding [where to lease] see the opportunity to have an office close to home.”

Meanwhile, Bressler said, the site’s proximity to the major freeway means that workers could commute to McDowell in “half and hour or less from most parts of the city.”

The 256,000-square-foot office complex, completed in 2007, is 74 percent leased to tenants that include financial cybersecurity firm Early Warning Services and Health Dialog, a healthcare management company.

Detroit-based mortgage lender Quicken Loans employed 1,100 workers in its office at the business park until June, when it announced it would relocate its Arizona operation to the One North Central tower in downtown Phoenix. Even so, Bressler said that the purchasers were optimistic about future leases.

“Our strategy is to try to identify projects with good sponsors and good real estate, where you can see a good story” for the property’s prospects, Bressler said. He noted that the construction of more office supply in the Scottsdale area would be a continuing risk, but stated his belief that rents are not yet high enough to support additional development.

The complex exemplifies the Phoenix area’s continuing shift towards service-sector employment and land use. When construction began ten years ago, the site’s developer, Matrixx Management, had to rezone the 155 acres from their prior agricultural use, according to the company’s website.

Representatives from Equus, iStar and CBRE—the broker for the deal—were not available to comment.


Source: commercial