thought this was a good time and a good
asset in which to invest,” Ingram states.
Parkway’s equity contribution comes to
$16 million. Additionally, a $60-million first
mortgage was obtained from Babson
Capital Management LLC with a fixed rate
of 5.53%, an initial 12-month interest-only
period and a maturity date of February
2016. Parkway estimates a going-in cap
rate of 5.8% and a leveraged IRR of roughly 11.8%. Upgrades to the tune of $9.2 million are planned.
In 2005, Parkway and OPERS formed
the discretionary fund, which currently
holds some 13 assets spanning 2. 7 million
here and in Houston, Phoenix, Atlanta,
Memphis and Orlando and Jacksonville, FL.
Citicorp Plaza, Ingram says, is the final
property that will be bought on behalf of this
fund, which was seeded with $50 million in
equity from Parkway and $150 million from
OPERS. Building on that $200 million and
using no more than 60% debt on purchases, the fund has amassed a $500-million
portfolio. The hold period is set at seven
“At $167 per sf, the
price that we paid is a
significant discount to
replacement cost. JIM INGRAM PARKWAY PROPERTIE”S
finance
$52M LOAN REFINANCES
UNIVERSITY PARK AT MIT
Cambridge, MA—Allstate Real Estate
Investment Group has provided a $52-mil-
lion loan to a joint venture between Forest
City Enterprises and the Massachusetts
Institute of Technology for the second
phase of its University Park at MIT project
here.
The 10-year leasehold mortgage refinances the existing debt on three buildings
in the 27-acre mixed-used development.
Dave Henderson, a senior portfolio manager at Allstate, says he is unsure of the total
amount of debt remaining on the properties
at the time the firm made the deal.
Capmark Finance arranged the transaction
for Allstate.
The properties used to secure the loan
include a 101,222-sf office building, 68,000
sf of retail space and a 950-space parking
garage. The assets were constructed 10
years ago and the office and retail components are fully leased, Henderson notes.
With today’s debt-constrained markets,
more life companies are providing financing for real estate deals. Henderson says
that Allstate did not have any qualms
about providing the capital for this site,
despite the turmoil in the credit markets.
“We’re strictly a portfolio lender and, like
many life companies, we keep every loan
that we make on book,” the Boston-based
University Park at MIT
executive notes. “We haven’t been nearly
as impacted by some of the capital markets turmoil as our conduit brethren, so we
continue to press on and make our loans
pretty much business as usual.” He adds
that Allstate committed to the financing
back in November.
The 2.3-million-sf University Park at MIT
is adjacent to the MIT campus and
includes 1. 5 million sf of research facilities,
more than 670 residential units, a 210-
room hotel and conference center and
retail space. MIT owns the land and leases
it to the joint venture that was created to
develop the site.
Henderson says Allstate was attracted to
the deal because the project is well leased and
is considered a very successful development
in the area. The site has been transformed
from blighted industrial buildings into a neighborhood centered around state-of-the-art
research facilities.—Jennifer McCandless ◆
Reprint orders: www.remreprints.com
Enter code F03084
years, but can be shortened or lengthened
“based on what we think the best timing is
to sell,” Ingram says.
Shedding the property was Apollo Real
Estate Advisors’ Value Enhancement Fund
IV LP, which acquired the complex for $65
million in 1999. The asset is currently 86%
occupied by such tenants as US Cellular
Corp., Citicorp North America and
CareerBuilder.com. Cushman & Wakefield
represented Apollo in the sale, which was
said to set a record for a class A asset in the
O’Hare submarket.
C&W brought the deal to Parkway’s
attention in November of last year, Ingram
recalls. What attracted Parkway to the
complex was its location near major thoroughfares and the city’s mass transit system. The executive says that the REIT has
acquired properties near municipal transportation hubs in Atlanta and “we’ve seen
how the train stations can be very beneficial
to the employers of the employees in the
building.”
And even though $100 million is a significant outlay, Ingram maintains Parkway
made a good deal. “At $167 per sf, the
price that we paid is a significant discount
to replacement cost.”—Maria Wood
Finance: Did You Know?
Corporate Pointe Developers has secured $14.2 million in refinancing for its Churchill Downs Apartments in
Pullman, WA, thanks to Cohen Financial. The six-year, non-recourse paper has a 75% LTV with a 6% interest rate
and 30-year amortization. The 203-unit student housing community is next to Washington State
University…Through a European equity fund, Thomas D. Wood and Co. arranged for $30.6 million in equity to
finance a Detroit-area developer’s purchase of interests in 35 Wal-Mart shadow-anchored shopping centers located in tertiary markets throughout the Midwest…GE Real Estate has provided $10 million in initial funding to
Dunwoody Self Storage LLC for a new 1,027-unit self-storage facility in Atlanta. The paper represents the initial
funding of a $25-million on-book, fixed-rate loan that includes refinancing the borrower’s construction loan, provides capital for the future construction of a second phase and allows for potential earn-out fundings over the loan
term…On behalf of Lowe Enterprises, Holliday Fenoglio Fowler has secured a $98-million adjustable-rate
acquisition paper from Anglo Irish Bank for Jefferson Plaza I and II in Arlington, VA. The office properties total
517,305 sf and are 97% occupied by the General Services Administration and other tenants…Ashford
Hospitality Trust has acquired a $38-million B-note mortgage loan secured by an interest in the Ritz-Carlton Key
Biscayne in Miami, and a $7-million mezzanine paper secured by an interest in the Hotel La Jolla in La Jolla, CA.
The $38-million interest-only paper has a 10-year term with a 9.66%
interest rate. The $7-million interest-only loan bears an interest rate
of 900 basis points over Libor with a three-year term and two one-year extension options. Ashford’s investment in the capital structures,
respectively, are about a 63% to 78% LTV and a 61% to 79%
LTV…NorthMarq Capital has secured a $49.9-million first mortgage
for the owner of the 188-unit Mirabella Apartments in Marina del Ray,
CA. The paper has a 10-year fixed-rate term plus a one-year float with
a 30-year amortization. NorthMarq arranged the financing through its
Churchill Downs seller/servicer relationship with Freddie Mac.
