Capital One Multifamily Finance provided a $5.5 million adjustable-rate Freddie Mac loan to refinance Regalia Crest, a 128-unit apartment community in Sacramento. Andrew Kwok, Assistant Vice President in Capital One Multifamily’s office in Newport Beach, California, originated the transaction.
The borrower, Trion Properties, purchased Regalia Crest Apartments in April, 2013 as an opportunistic investment that combined a strategy involving both operational and physical repositioning of the asset. The property is well-located in the Arden Arcade submarket of Sacramento and is situated adjacent to major thoroughfares and retail centers. Project amenities include a swimming pool, spa, clubhouse, and secure gated access. Trion implemented a program of capital improvements including replacing HVAC units and kitchen appliances, installing new flooring and countertops, and installing a surveillance system. Currently, the occupancy rate is in excess of 95 percent and rising.
“We tailored a debt structure that allowed Trion to recoup some of the capital used to renovate the project, while simultaneously reducing the debt service expense and increasing cash flow,” Kwok says. “In addition, we put together terms that will provide Trion with maximum prepayment flexibility.”
Calculated at 80 percent LTV, the adjustable-rate loan has a seven-year term, a one-year interest-only period, and 30 years of amortization payable on an actual/360 basis. In addition, it has a flexible prepayment structure, one-year lockout followed by one percent thereafter.
“Capital One has assembled a financing solution that advances our goals for the property,”says Max Sharkansky, one of Trion’s founders. “It’s great working with a lender who can align our investment strategies directly with a capital solution.”
Capital One Bank’s Commercial Real Estate Group provides financing in markets nationwide, offering a comprehensive array of solutions for property owners and developers, including balance sheet and agency lending, financing, underwriting, and treasury management.