By Cathy Cunningham | February 28, 2019 9:30 am

The view from Soho Beach House’s rooftop. Photo: Alexander Tamargo/Getty Images for Atlantico Rum

Soho House has scored $117 million in debt to refinance Soho Beach House, its Miami flagship hotel at 4385 Collins Avenue, sources told Commercial Observer.

Citigroup provided a $55 million senior loan in the deal, while Rexmark provided the $62 million mezzanine loan.

The deal closed Wednesday. Mission Capital Advisors arranged the financing on behalf of Soho House.

The property was originally erected as Sovereign Hotel in 1941 before its redevelopment into the 16-story Soho Beach House hotel and members’ club in 2010.

Soho House—which is majority-owned by billionaire Ron Burkle’s The Yucaipa Companies as well as its founder, hotelier Nick Jones—acquired the hotel from Ryder Properties in 2008. Architect Allan Shulman designed the South Beach property, blending old and new in encompassing the original structure along with a new tower.

Today, the restored Art Deco building features 50 luxury suites, two restaurants, a Cowshed spa, a screening room, a 100-foot swimming pool and an eighth-floor rooftop terrace bar and plunge pool with ocean views.

The Soho House flag owns and operates exclusive, member-only clubs, hotels, spas and restaurants with 23 locations in Europe, North America and Asia. Globally, the company has almost 100,000 members.

Officials at Citi, Rexmark and Mission Capital declined to comment. Officials at Soho House did not immediately return a request for comment.

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SAN ANTONIO, Texas (Feb. 25, 2018)

Mission Capital Advisors announced that it represented Entrada Partners in the sale and financing of a 484,369-square-foot industrial portfolio in San Antonio, Texas. The Mission Capital team of Will Sledge and Kyle Kaminski arranged the sale on behalf of both Entrada and the seller, a CMBS special servicer. The Mission Capital Debt and Equity Finance team of Alex Draganiuk and Lexington Henn arranged the non-recourse acquisition loan.

The portfolio comprises four properties, three of which are located just inside I-410 in the northwest of the city, and the fourth just minutes away in Leon Valley. The portfolio’s total occupancy is 88 percent. The properties include:

      • 7402-7648 Reindeer Trail, a five-building, 251,125-square-foot distribution property
      • 1700 Grandstand Drive, a three-building property, which features 59,863 square feet of light industrial / flex space
      • 7042 Alamo Downs Parkway, a 27,987-square-foot light industrial / flex property
      • 5405 Bandera Road, a 145,394-square-foot distribution center just over the San Antonio border in Leon Valley

“Entrada was purchasing this property from a CMBS special servicer, and we were presented with a very limited timeframe in which to close the acquisition financing,” said Draganiuk. “With four properties serving as collateral and a fair amount of required maintenance, this was a complex deal for lenders to underwrite, but we were able to close a non-recourse loan with a regional bank.”

Added Draganiuk: “By canvassing the capital markets for the best offers, we were able to secure very strong terms for Entrada. The mortgage was structured interest-only for the first several years, and also featured release prices for the different properties, giving Entrada significant flexibility to execute its business plan.”

For Entrada, the four properties were attractive because of their significant upside as well as their geographic location. Headquartered in Los Angeles, the firm has a regional office and significant holdings in San Antonio, and is ideally positioned to unlock the portfolio’s full value.

“The investment represented a fantastic opportunity to expand our presence in the San Antonio market,” said Reuben Berman, founder and partner of Entrada. “We believe San Antonio provides a great investment environment due to its job and population growth, diversified economy, abundant work force and affordable cost of living. San Antonio is the 24th largest MSA in the United States, but has the 3rd highest population growth rate (15.5% between 2010 and 2017). This growth is naturally creating more demand for real estate to live and work in.”

By Timea Matyas | Commercial Property Executive

Entrada Partners Acquires San Antonio Industrial Portfolio

The four properties have a combined 484,369 square feet and an 88 percent occupancy rate. All the assets are close to the Interstate 410 loop.

Entrada Partners has acquired a four-property, 484,369-square-foot industrial portfolio in San Antonio, Texas. Mission Capital Advisors arranged both the sale and the financing of the assets. The portfolio’s total occupancy is 88 percent.
Three of the four assets are located within the Interstate 410 loop, close to the interstate in the northwest area of the city, and all are within 4 miles of Ingram Park Mall. The properties are:

      • 7402-7648 Reindeer Trail, a five-building, 251,125-square-foot distribution facility
      • 1700 Grandstand Drive, a three-building property which includes 59,863 square feet of light industrial/flex space
      • 7042 Alamo Downs Parkway, a 27,987-square-foot light industrial/flex property
      • 5405 Bandera Road, a 145,394-square-foot distribution center

Mission Capital Advisors’ Will Sledge and Kyle Kaminski of the asset sales team arranged the transaction on behalf of the seller. Alex Draganiuk and Lexington Henn of the company’s capital debt and equity finance team arranged the non-recourse acquisition loan on behalf of the buyer. In late 2018, the company also arranged a $13 million floating-rate financing for a Chicago retail asset.
“The mortgage was structured interest-only for the first several years, and also featured release prices for the different properties, giving Entrada significant flexibility to execute its business plan,” Draganiuk said in a prepared statement.

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Buch the Trend — A Commercial Real Estate Blog

“An Overview of Historic Tax Credit Transactions”

By Steve ‘Buch’ Buchwald – The Debt & Equity Finance Group

(Steve ‘Buch’ Buchwald, New York, 2/5/2019) — As it becomes more and more popular to gut renovate beautiful old buildings centrally located in various markets across the county, Historic Tax Credit transactions are becoming more common.  Much to the chagrin of lenders, HTC deals have their own rules and, unfortunately, not all these transactions have identical structures.   This further convolutes what is already a very complex and esoteric intricacy to commercial real estate transactions.

So, let’s back up. Historic Tax Credits can be either Federal Tax Credits, administered by the National Park Service (NPS), or State Tax Credits, administered by the state in question.  These are based on qualified rehabilitation expenditures (QREs). While State Tax Credits can be relatively straight forward, the Federal Tax Credit rules often dictate complex org chart structures and create confusion among developers and lenders alike.

After a new set of IRS tax guidelines applicable to HTCs in 2014 were issued, the outright upfront sale of HTCs was prohibited and instead the tax credit investor had to become an investor in the transaction.  The upfront payment was capped at 25% of the purchase price of the tax credits and the investor now had to have “skin in the game” throughout the construction period.

This resulted in two different structures:

  • The Single-Tier Structure – the structure whereby the tax investor is admitted as a partner of the property-owning entity and that entity is thus entitled to claim the HTCs.
  • The Master-Lease Structure – The property owner leases the property to an entity owned at least 99% by the tax investor. The master lessee in turn obtains a 10% stake in the property owner.  While the property owner funds the QREs, it is permitted to pass the HTCs to the master lessee and thus to the tax investor through its interest in the master lessee.

If it sounds complicated, it is because it is.  Even experienced lenders often balk at having to sign a subordination, non-disturbance and attornment agreement (SNDA) with the master-lease structure, claiming they will not subordinate to anyone.  However, this is a must for HTC transactions since the SNDA prevents the collapse of the master lease structure upon foreclosure and, in turn, protects the tax credit investor’s rights to the HTCs.  These tax credits can then be used by the investor over the five-year compliance period (20% per year) after obtaining Part 3 approval (the final NPS sign-off) post-construction. During this time, any take-out financing must also agree to sign a SNDA with the tax credit investor.

Another common point of confusion is how the HTCs can be used as a source of funding.  There are generally three ways to capitalize a project with Federal HTCs:

  • A tax credit investor invests through the Single-Tier Structure and as a partner is entitled to the HTCs. This is straightforward as this investor would come in as a traditional LP partner. That said, this is incredibly rare and is not the standard for HTC commercial real estate transactions.
  • A tax credit investor purchases the HTC’s with the Master-Lease Structure and funds 25% of the HTC purchase at closing. Generally, these investors pay between 80 and 95 cents on the dollar and then 25% of this number (about 20-23% of the total HTC’s) can be used as a source of funds in the developer’s sources and uses. The remainder will typically come in over the course of the development, commonly at C of O, with some small amount held back until the developer obtains Part 3 approval from the NPS (typically 6 months or so after C of O).
  • With a tax credit investor structure similar to #2 above, the developer can then also obtain a tax credit bridge loan secured by the remaining payment stream from the tax credit investor that can be monetized up front. The amount of proceeds on the remaining 75% of the tax credit purchase net of the capitalized interest reserve and points on the tax credit bridge loan can then be added as an additional source of funds.

While these transactions are complicated, HTCs do significantly reduce the effective cost basis of renovation deals and thus are a necessary evil.  Taking the time to properly understand the HTC structures can give developers a leg up on their competitors and lenders more deal flow and higher yields.  Additionally, adding qualified professionals that understand HTCs to the development team including mortgage brokers, real estate attorneys, and tax credit consultants is a must for any developer that wants to tackle the complexities involved with Historic Tax Credit transactions.

February 14, 2019 | Connect Chicago Commercial Real Estate News

Mission Capital Advisors’ asset sales group is marketing 400 Nave Rd., SE, a 243,000-square-foot industrial property in Massillon, OH net leased to a credit tenant. The firm’s Will Sledge and Kyle Kaminski are marketing the property on behalf of a CMBS special servicer.

The single-story property is fully occupied by A.R.E. Accessories, a manufacturer of fiberglass and aluminum truck caps and covers as well as LED lighting.

“This location serves as A.R.E.’s headquarters, and over the past few years, A.R.E. has made improvements to several portions of the building interior,” said Kaminski. “With a credit tenant demonstrating that level of commitment, this property is likely to maintain its strong cash flow for the foreseeable future.”

The property will be auctioned on the RealINSIGHT Marketplace in early March. “It’s rare to find an investment opportunity like this on a real estate auction platform, and we anticipate significant interest from net-lease buyers,” Kaminski said.

With 65.7-percent occupancy, property offers investors the opportunity to add value through strategic lease-up

WAITE PARK, Minn. (Feb. 6, 2019) – Mission Capital Advisors, a leading national real estate capital markets solution firm, today announced that its Asset Sales Group is marketing Marketplace Retail and Office Center, a five-building, 121,406-square-foot, mixed-use property located at 110 2nd Street South in Waite Park, Minnesota. The Mission Capital team of Will Sledge, Kyle Kaminski and Tom Karras is marketing the property on behalf of the seller, a CMBS special servicer. The properties will be auctioned on the RealINSIGHT Marketplace platform, with the bidding window opening on March 4 and closing on March 6.

Located in the western portion of the St. Cloud submarket, Marketplace Retail and Office Center consists of a four-story, 88,190-square-foot building containing a mix of retail and office space, and four single-story retail buildings, ranging in size from 1,740 to 19,716 square feet. The property’s total occupancy is 65.7 percent.

“With five separate buildings, and room to build significantly on the property’s existing tenant base, this offering will provide strategic investors with various opportunities to create value,” said Kaminski. “In addition to increasing cash flow by leasing up the vacant space, the buyer will be able to consider a range of other value-add plays, including selling off some of the outparcels, or redeveloping parts of the property.”

The property’s retail tenant mix features several national and retail chains, including Starbucks and Pizza Ranch. The property is shadow-anchored by Dick’s Sporting Goods, Five Below and Fresh Thyme Farmers Market. With its location in the prime retail area of St. Cloud and Waite Park, it is less than a mile from the popular Crossroads Center, offering convenient access to Macy’s, JCPenney, Sears and Target.

“This is the perfect investment for a buyer who combines a creative approach with a strong leasing and management team that can increase the property’s occupancy,” said Kaminski. “With its strong location in the local market, we anticipate significant interest from local and national investors.”

Mission Capital Brings Retail/Office Mix to Market in St. Cloud

February 7, 2019

Mission Capital Advisors’ asset sales group is marketing Marketplace Retail and Office Center, a five-building, 121,406-square-foot, mixed-use property in Waite Park, MN. The team of Will Sledge, Kyle Kaminski and Tom Karras is marketing the property on behalf of a CMBS special servicer.

The properties will be auctioned on the RealINSIGHT Marketplace platform, with bidding between March 4 and March 6.

Located in the western portion of the St. Cloud submarket, not far from the popular Crossroads Center, Marketplace Retail and Office Center includes a four-story, 88,190-square-foot building containing a mix of retail and office space, and four single-story retail buildings. Total occupancy is 65.7%.

“This is the perfect investment for a buyer who combines a creative approach with a strong leasing and management team that can increase the property’s occupancy,” said Kaminski. “With its strong location in the local market, we anticipate significant interest from local and national investors.”

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Mission Capital selling five-building mixed-use property in Minnesota

February 7, 2019

Mission Capital Advisors’ Asset Sales Group is marketing Marketplace Retail and Office Center, a five-building, 121,406-square-foot, mixed-use property at 110 2nd St. South in Waite Park, Minnesota. The Mission Capital team of Will Sledge, Kyle Kaminski and Tom Karras is marketing the property on behalf of the seller, a CMBS special servicer.

The properties will be auctioned on the RealINSIGHT Marketplace platform, with the bidding window opening on March 4 and closing on March 6.

Located in the western portion of the St. Cloud submarket, Marketplace Retail and Office Center consists of a four-story, 88,190-square-foot building containing a mix of retail and office space, and four single-story retail buildings, ranging in size from 1,740 to 19,716 square feet. The property’s total occupancy is 65.7 percent.

The property’s retail tenant mix features several national and retail chains, including Starbucks and Pizza Ranch. The property is shadow-anchored by Dick’s Sporting Goods, Five Below and Fresh Thyme Farmers Market. With its location in the prime retail area of St. Cloud and Waite Park, it is less than a mile from the popular Crossroads Center, offering convenient access to Macy’s, JCPenney, Sears and Target.

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Mission Capital Advisors Marketing 121,406-Square-Foot MN Retail/Office Property

February 11, 2019

WAITE PARK, MN—Mission Capital Advisors, a national real estate capital markets solution firm, is marketing Marketplace Retail and Office Center, a five-building, 121,406-square-foot, mixed-use property located at 110 2nd Street South in Waite Park, MN. The Mission Capital team of Will Sledge, Kyle Kaminski and Tom Karras is marketing the property on behalf of the seller, a CMBS special servicer.

Located in the western portion of the St. Cloud submarket, Marketplace Retail and Office Center consists of a four-story, 88,190-square-foot building containing a mix of retail and office space, and four single-story retail buildings, ranging in size from 1,740 to 19,716 square feet. The property’s total occupancy is 65.7 percent.

“With five separate buildings, and room to build significantly on the property’s existing tenant base, this offering will provide strategic investors with various opportunities to create value,” says Kaminski. “In addition to increasing cash flow by leasing up the vacant space, the buyer will be able to consider a range of other value-add plays, including selling off some of the outparcels, or redeveloping parts of the property.”</em

The property’s retail tenant mix features several national and retail chains, including Starbucks and Pizza Ranch. The property is shadow-anchored by Dick’s Sporting Goods, Five Below and Fresh Thyme Farmers Market. With its location in the prime retail area of St. Cloud and Waite Park, it is less than a mile from the popular Crossroads Center, offering convenient access to Macy’s, JCPenney, Sears and Target.

“This is the perfect investment for a buyer who combines a creative approach with a strong leasing and management team that can increase the property’s occupancy,” says Kaminski. “With its strong location in the local market, we anticipate significant interest from local and national investors.”

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2/05/19

AVISON YOUNG – Jay Maddox and Peter Sherman with Avison Young arranged a $29 mil loan on behalf of Mega Home LLC to refinance the construction and sell-out of a partially completed 80-unit condominium project located in Los Angeles’ Koreatown community. Locally based private lender Parkview Financial provided the loan. Golden Galaxy Plaza Condominiums is located on Leeward Ave, two blocks south of the Wilshire/Vermont MTA station. It will feature luxury condominium units ranging in size from 493 sf to 1.8k sf, with an average unit size of 1.2k sf, and consist of a mix of studio, one-, two- and three-bedroom units. All units will feature modern appliances and top quality amenities. The five-story building includes a pool, spa, interior courtyards, gym, meeting space and 188-stall subterranean parking garage. Completion is anticipated in spring of 2019.

NORTHMARQ CAPITAL – Nate Prouty, Andy Slaton and Briana Harney with NorthMarq Capital arranged a $26 mil bridge loan for the acquisition of Cypress Village, an 88-unit multifamily property located at 6343 Lincoln Avenue in Buena Park. Cypress Village, built in the early1960’s, was acquired as a value-add opportunity. The borrower plans to update unit interiors and make improvements to the exteriors and common areas. The property is located in close proximity to Cypress College, retail establishments along Lincoln Avenue, Buena Park’s Downtown shopping center, and Knott’s Berry Farm. The transaction was structured with a 24-month, interest-only term. The borrower was a local entity in a joint venture with Harbert Management Corporation.

GEORGE SMITH PARTNERS – Shahin Yazdi, Jonathan Lee, David Stepanchak, Matthew Kirisits, Olga Alworth and Samuel Sarshar with George Smith Partners placed an $8 mil bridge loan for the refinance of a 40% occupied medical office building in Riverside County. The loan floats at a rate of Prime + 1% with interest only payments. The initial term is 12 months and two 6-month extensions are available. Proceeds are structured as $5.8 mil in initial funding, with an additional $2.2 mil that can be drawn down as the property leases up. The borrower had recently successfully negotiated a long-term lease with a well-known anchor tenant. They also invested $1.4 mil in capital expenditures resulting in a total renovation of the property. Since signing the Anchor Tenant, the borrower has successfully negotiated long term NNN leases with several other smaller tenants.

MISSION CAPITAL ADVISORSJason Parker, Steven Buchwald and Alex Draganiuk with Mission Capital Advisors have arranged a $7.3 mil, non-recourse land loan for the acquisition of 5656 San Felipe Street, a 1.26-acre development site in Houston. The borrower, Houston-based Pelican Builders, is working to finalize plans for an as-of-right, 17-story condominium project, which will include 67 luxury residences and 191 parking spaces. Located at the nexus of the highly desirable Galleria/Uptown and Tanglewood neighborhoods, the 322.7k sf property will provide the area with much-needed luxury residential product. Current plans for the development call for 67 well-appointed residences with on-site amenities that include a pool deck, resident lounge, state-of-the-art fitness center and a dog park. The project is expected to break ground in October 2019. With its central location near leading commercial and residential neighborhoods, the development will offer residents easy access to a wide range of shopping and cultural / entertainment options, including Whole Foods, iPic Theater and the Houston Country Club. It is within 1.5 miles of The Galleria, the fourth largest retail complex in the country, with high-end tenants including Saks Fifth Avenue, Nordstrom and Neiman Marcus. Led by Robert F. Bland, Robert F. Bland, Jr. and Derek Darnell, Pelican Builder’s portfolio includes more than 2,000 residences, spread across high-rise and mid-rise buildings, townhomes and apartment projects.

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February 1, 2019

The site of the Mission Gateway mixed-used development at Johnson Drive and Roe hasn’t had much construction activity in the past few weeks — and it’s raised some questions from Mission residents.

Developers say the lack of activity has been on account of the cold as well as the ice and snow from winter storms. Besides that, GFI, the development partner working with Cameron Group LLC lead Tom Valenti on the project, has two other major projects in the Kansas City area and only has so much personnel to go around.

However, Andy Ashwal with GFI said the project is actually ahead of construction schedule, even though they’ve only had seven to 10 productive work days in the past six weeks. GFI has employed staff to make the most out each of those work days in order to stay on track and exceed the schedule.

But what’s more “exciting” for the development as a whole is the developers in early December signed on a 90,000-square-foot retail entertainment tenant, which will go alongside the 40,000-square-foot food hall that will be curated by chef Tom Colicchio. The new developments have “caused us to shift the business plan.” Ashwal said the developers plan to speed up construction to match the needs of the entertainment tenant.

“Instead of the phased approach that we had before, which impacted how we go ahead and capitalize the project, we had to shift that so we could capitalize the entire project so it can be built, essentially, simultaneously all at once with design and flowing right into construction for the entire project,” Ashwal said.

Valenti said the name of that tenant will be announced “soon,” which could mean the next month.

Meanwhile, the developers also signed on with Mission Capital to represent the developers and capitalize the project.

“We’ve got to have plans done for all of these components in order to get our financing, so we are really focusing on the plans more so now than we are on the construction,” Valenti said. “We’re way ahead on schedule on the construction, and the construction can wait for a period of time while we get this all moving forward.”

Ashwal said developers expect to complete construction and fully activate the site in the first half of 2021. The last piece of the development to be completed will be the 200-key hotel component.

Additionally, the following components will come into place:

    • 7

5,000-square-foot office building to be complete in the fourth quarter of 2020

  • 169 apartments and 50,000-square-feet of small shop retail below them will be ready in summer 2020
  • Plans for a parking structure are also in the works. Construction for the 90,000-square-foot retail tenant in summer 2020

 

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