A Debt & Structured Finance team in the San Diego office of CBRE Capital Markets has arranged a $199 million loan on behalf of San Diego-based Strata Equity Group for its purchase of an 11-property apartment portfolio near Washington, D.C.
Bill Chiles, Scott Peterson, and Brian Cruz of CBRE’s San Diego office, along with David Webb and Maxi Thiels Leachman in the firm’s Washington, D.C. office, secured the aggressively priced 12-year, interest-only loans with Fannie Mae. Mike Muldowney, Michael Rudolph of CBRE’s Baltimore office represented the seller, D.C.-based Federal Capital Partners.
Strata Equity Group is a privately held real estate investment, development, and management company that operates under two primary business strategies: acquiring and entitling land throughout Southern California for long-term development and acquiring and managing cash-flowing real estate with a focus on class-A and -B apartment communities. CBRE Debt and Structured Finance is an integrated group within CBRE Capital Markets and assists with the placement of debt and equity for all major property types, including all forms of secured and unsecured debt origination, loan servicing, and note sales.
All 1,731 units in the portfolio are located within a master-planned community of St. Charles, Maryland, 13 miles from the Washington, D.C., Beltway. CBRE’s Peterson says, “The portfolio is a unique opportunity to purchase eleven assets of varying ages and class in one submarket. The purchase allows Strata to materially expand its presence into a new geographic market, as well as take advantage of best-in-market loan terms given such great economies of scale.”
The assets feature a variety of floorplans and price points to cater to a wide variety of renters offering affordable to condominium-quality luxury apartments. The portfolio comprises class-A and -B communities with an average year built of 1997 and an average unit size of 998 square feet. More than 50 percent of the units have direct entry or location on the first floor.
Renovations for the assets have been ongoing since 2014, and Strata plans to complete all remaining interior rehabs while making numerous other programmatic capital improvements. Each property is part of a neighborhood association that provides residents access to a community center and recreational facilities such as swimming pools, tennis courts, and playgrounds.