Mission Capital Advisors (MCA) is excited to announce it has been acquired by Marcus & Millichap, Inc. (NYSE:MMI) and will be a subsidiary of Marcus & Millichap Capital Corporation (MMCC). For the past few years we have given tremendous thought and had numerous exploratory conversations regarding how best to position our company for the future and to continue providing the best service and suite of offerings to you, our most valued clients. For us, providing you capital solutions for your transactions has excited and energized us. However, it is the ongoing and long-term client relationships and friendships formed in the process that are most precious to us.
So why Marcus & Millichap? The simple answer is that our core values and approach to client service are perfectly aligned. In business since 1971, Marcus & Millichap closes more transactions than any other brokerage firm in the country. Its 2,000 investment sales and capital markets professionals are located in over 80 offices across the U.S. and Canada. It is a New York Stock Exchange-listed company with a market cap of approximately $1.225B and a strong, debt-free balance sheet. On a daily basis, Marcus & Millichap delivers deep capital markets expertise, market intelligence, and extensive research to its clients. We can now share this access to transactions, capital sources, research, technology and more – with you. There are fantastic synergies across our respective organizations with very little overlap.
Mission Capital will be keeping its name, brand, and identity for many years to come and will continue to provide its suite of capital markets solutions, asset sales, diligence, consulting and document curative services.
Mission Capital is also pleased to announce that it has hired Spencer Kirsch as Vice President and John Jenkins as an Associate as part of the loan sale team.
Spencer Kirsch joins as a Vice President after a 5-year stint at Waterfall/ReadyCap REIT. He has extensive deal management and analytics experience in the small balance commercial and residential portfolio sectors, most recently in non-QM and SFR portfolio acquisitions. Spencer has a BS in Finance from Tulane University.
John Jenkins joins as an Associate after almost three years with the largest US residential mortgage REIT, Annaly Capital Management. He has specialized in the structuring, data analysis, and acquisition of billions of dollars of single-family loan portfolios. In addition, he has worked on both seasoned and new origination whole loan transactions. John has an MS in finance from Imperial College Business School, London, and BA in Business/Economics from Ursinus College and is a CFA.
Both John and Spencer will be located in the New York office and working closely with Mission executives in New York, Texas, California and Florida.
As always, we look forward to working with you in the future. If you have any questions, please do not hesitate to reach out to us.
New Yorkers have long shared apartments in order to afford the city’s famously high rents. This, of course, often entails hunting down an apartment with a real estate agent — and paying a broker’s fee, plus a hefty deposit — then furnishing the place, lining up roommates and getting electricity and internet service up and running.
For several years, co-living companies have been popping up, providing a fast, streamlined alternative in the form of fully furnished, move-in-ready rooms in shared apartments.
Lately the trickle of co-living activity has become a torrent.
Homegrown companies are expanding into new neighborhoods. Brands that have built up their businesses elsewhere are planting their flags here. And even traditional real estate companies are getting into the act.
“No one wants to be left behind,” said Matthew Polci, a managing director at Mission Capital Advisors, which has been financing an increasing number of co-living projects.
With so many in the pipeline, Brad Hargreaves, chief executive of the Brooklyn-born co-living company Common, predicts that the number of co-living rooms in the New York today — over 25,000, by some estimates — is a “fraction of a fraction of what it will be.” His own company, which he founded in 2015 and now operates in six cities, has 520 rooms in 20 buildings in New York alone, and more on the way.
Communal space in the East Village building includes this movie room. Credit: George Etheredge for The New York Times
Although there are differences among co-living companies — some focus on communal life with comfy lounges and social activities, others emphasize getting out into the neighborhood — all do essentially the same things: trick out rooms, hook up utilities, hire housekeepers to clean and maybe replenish toiletries, match up roommates — and charge a monthly rent that covers all of the above. They also offer wiggle room in the lease term.
But as more co-living companies muscle their way into New York — and competition among them heats up — some are upping the ante. They are jazzing up the décor in their buildings. They are giving some rooms private bathrooms and adding full-fledged studios and one-bedroom apartments so a resident can graduate from a shared apartment to his or her very own place. And they are not only retrofitting apartments in existing small- and medium-size buildings but also working with developers to add co-living to new large-scale projects — or even planning their own buildings from scratch.
Andrew Athanasiadis shares a three-bedroom, one-bath apartment in a co-living building in the East Village run by Quarters. The common space in his apartment combines living room, kitchen and laundry room. Credit: George Etheredge for The New York Times
For tenants, none of it comes cheap.
The San Francisco-based Bungalow, which typically works with owners of small buildings, offers some of the least expensive co-living rooms in New York, based on a comparison of prices online. But the furnishings are fairly basic and the housekeeping monthly rather than weekly.
Generally, the all-inclusive rent for a co-living room starts at around $1,300 and can run well over $2,000 for a room with an en suite bath — not unreasonable, perhaps, considering all that’s covered in the monthly fee, but not exactly low budget.
Still, for those moving to New York for the first time, or for a finite period, the arrangement can be a boon.
It certainly has been for Andrew Athanasiadis, a Chicago native. He had two weeks to find a place to live here after landing a job at Cushman & Wakefield, but he didn’t know New York well and was loathe to get locked into a long-term lease for fear he’d end up in a neighborhood he didn’t like.
A Chicago friend had mentioned the co-living company Quarters, which was founded in Berlin and had opened a project in Mr. Athanasiadis’s hometown. Quarters, he learned, also operates two locations in Manhattan (and has three more in the works, in Brooklyn).
A bedroom was available in a three-bedroom, one-bath apartment in the company’s building in the East Village and he signed a six-month lease at a rate of $1,700. He was grateful not to have to “buy all new everything” and figured he could move once he got his bearings.
The building’s communal space also has a foosball table. Credit: George Etheredge for The New York Times
But he found he liked the social activities in the building, which include weekly happy hours, as well as outings that he and other residents planned on their own, such as a trip to the Hamptons over the summer. The building provided an instant social network. And its location meant an easy commute to work.
Recently he renewed his lease, locking in a discounted rate of $1,600 because he signed for another six months. Mr. Athanasiadis, who is 30, said that eventually he will want his own place. For now, he added, “as long as the price is right I see no reason to move.”
Although Mr. Athanasiadis’s building is a six-story brick apartment house from the 1920s that was retrofitted for co-living, Simon Baron Development’s Alta+ rental tower, which opened in 2018 in Long Island City, devoted the second through the 16th of its 43 floors to co-living from the start. The co-living operator Ollie advised on the layouts of the 169 shared suites on those floors and now manages them.
The model co-living apartment is 918 square feet — the size of a one-bedroom one-bath apartment on the regular upper floors of the building. By eliminating the living room, Ollie managed to fit in three modestly sized bedrooms, two baths and a kitchen. And perhaps borrowing a page from the micro-unit trend, the company outfitted the bedrooms with Murphy beds and multifunctional furniture so they could each feel like a living room during the day.
While Alta+ combines co-living and conventional apartments in a single building, the Collective, a London-based company, is experimenting with co-living/hotel hybrids.
A co-living building run by Common on West 146th Street in Harlem. Credit: George Etheredge for The New York Times
The company recently acquired a century-old industrial plant in Long Island City that had been converted to a 125-room hotel called the Paper Factory (the building once produced newsprint). After a few tweaks and a rebranding, the property was relaunched late last year as the Collective Paper Factory, offering rooms available for a single night or up to 29 (the maximum stay starts at $2,300).
And the Collective has three ground-up projects in progress. Working with Tower Holdings Group, a local developer, the company will soon begin constructing a 439-unit project in the Bedford-Stuyvesant neighborhood of Brooklyn; it will offer a combination of short- and long-stay rooms across three buildings. In southeast Williamsburg, it will build a 26-story tower with 246 co-living units and 306 hotel rooms. And a central Williamsburg project will combine 97 rooms of student housing with 127 studios for nightly and monthly stays. All rooms will have private baths.
The projects, which are expected to be completed in 2022, will also offer amenities associated with luxury housing. The southeast Williamsburg building, for instance, will have multiple lounges along with a hammam/spa and a music practice room.
A shared kitchen in the Harlem co-living building. Credit: George Etheredge for The New York Times
While such projects may point in a plush direction for co-living, there are also plans for projects dedicated to those of more modest means — the 21st-century equivalent, perhaps, of 19th-century boardinghouses and 20th-century single room occupancy hotels.
Kitchens in co-living apartments often feature multiple coffee makers to make sure everyone’s caffeine quota is covered in the morning. Credit:George Etheredge for The New York Times
The city’s Department of Housing Preservation and Development recently held a competition eliciting proposals for co-living projects that would become part of the city’s affordable housing efforts. In October the agency announced that it had chosen three “shared housing” projects to be constructed over the next few years.
The largest of these, in East Harlem, will be developed by Common working with L+M Development Partners and LIHC Investment Group, an affordable housing owner. Two-thirds of the units in the project will go to tenants earning 50, 80 and 120 percent of city’s area median income. The lowest rent: around $800.
Realinsight Marketplace is slated to hold an online auction in September for the Greenbriar Corporate Center, with an opening bid set at $4.5 million.
By Daniel J. Sernovitz – Staff Reporter, Washington Business Journal
August 27, 2019
An online auction site is slated to open bidding at $4.5 million next month for a Fairfax County office complex that sold during the height of the real estate market in 2006 for nearly five times as much.
RealInsight Marketplace will kick off the auction Sept. 10 on behalf of Mission Capital Advisors LLC. The real estate capital markets firm was brought in by special servicer CWCapital Asset Management to help dispose of the Greenbriar Corporate Center after it was foreclosed on earlier this year. The prior owner of 13135 Lee Jackson Highway, an affiliate of North Bethesda-based Guardian Realty Investors LLC, defaulted on the debt it took out in 2006 to buy the property for $21.4 million, according to loan servicing notes and Fairfax County land records. It is now assessed at nearly $13.6 million.
Representatives for Guardian could not be reached for comment.
Kyle Kaminski, a director with Mission Capital, said he hopes the online auction will tap into a larger pool of investors looking for value-add properties like Greenbriar than traditional marketing would. Greenbriar, located just west of the Route 50 interchange with the Fairfax County Parkway, is a 116,581-square-foot property developed in the mid-1980s.
“I think it’s mostly a function of the market is active right now. There’s lots of groups out there paying good money for deals,” Kaminski said. “The auctions themselves tend to lend themselves well to situations like this, and this one happens to be one that has some positive momentum.”
Commercial real estate firm CBRE, handling leasing for the property, recently inked an 8,700-square-foot lease with Virginia Surgery Associates. As of July 31, Greenbriar was about 77% leased to tenants including Fairfax Pediatrics Associates, Long & Foster Real Estate and Re/Max Premier.
Greenbriar is one of a dwindling number of properties sold or renovated in the lead-up to the Great Recession with debt that was bundled into a larger pool of commercial mortgage-backed securities, or CMBS. Much of that debt has since come due, and many of the properties impacted have either been sold at deep discounts, foreclosed on, or given back to their lenders as deeds in lieu of foreclosure.
Mission Capital Arranges $15.2M Loan for Brooklyn Redevelopment Project
The Box Factory is a redevelopment project in Brooklyn that will convert a former industrial building into an office and entertainment complex.
NEW YORK CITY — Mission Capital Advisors has arranged a $15.2 million loan for The Box Factory, a former industrial building in Brooklyn that is being redeveloped into a 65,837-square-foot office and entertainment complex. Proceeds will be used to refinance construction debt and further redevelop the property. Jonathan More, Ari Hirt and Lexington Henn of Mission Capital arranged the financing on behalf of the project development team, which is led by Brickman Real Estate and Hornig Capital Partners. Construction began in 2018. Pine River provided the loan.
Hotel is Ace Hotels’ first “Sister City”-branded property
NEW YORK (March 20, 2019)
Mission Capital Advisors announced that it has arranged $80 million of bridge financing for the recently completed Sister City hotel, a 200-key hospitality property located at 225 Bowery, at the intersection of the SoHo and Lower East Side neighborhoods of Manhattan. The Mission Capital team of Jonathan More, Steve Buchwald, Ari Hirt and Jamie Matheny arranged the first-mortgage financing from Bank Hapoalim on behalf of a partnership between Omnia and Northwind Group.
After purchasing the property, Omnia and Northwind commenced a major construction campaign, adding three floors and transforming the century-old building into an amenity-laden, food-and-beverage-centric hotel. The first Sister City property created by Ace Hotels, the 14-story building will feature a 234-seat café restaurant, a 150-seat rooftop bar with sweeping views of Manhattan, and a ground-floor garden.
“We see that the Bowery is really becoming a prominent nightlife destination,” said Northwind managing partner Ran Eliasaf. “It has truly become the bridge between the Lower East Side and Nolita in Manhattan.”
A new concept from Ace Hotels, which will manage the property, the Sister City brand brings a fresh experience to travelers, offering comfort, beauty and human connection. Acclaimed for its hotels’ innovative design and development, Ace is one of the premier hotel operators, with nine other properties – and 1,400 rooms – in prime markets across the country.
Omnia and Northwind previously worked together on a number of successful projects, including a luxury rental building at 351 West 54th Street in Hell’s Kitchen, which they sold to Bentley Zhao in 2017 for $34 million.
The Omnia Group is a full-service development, design, and building firm focused on commercial and residential real estate in Manhattan. Run by President David Paz, Omnia has completed over 20 projects in Manhattan with over 475,000 square feet of residential units with a combined value of over $300 million.
The Northwind Group, led by Ran Eliasaf, is a Manhattan based real estate private equity firm focused on commercial, value-add residential, hospitality, and senior-living properties.
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.
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.”
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.
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.”
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 ADVISORS – Jason 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.
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
Starcity has received a $14.5M construction loan for the redevelopment of a Tenderloin building into a 55-unit co-living facility.
Mission Capital Advisors’ Debt and Equity Finance Group arranged the loan for the co-living company for the property at 229 Ellis St. in San Francisco.
Starcity bought the building, which has an interesting history, in March. The property was built in 1910 and operated as a Turkish bathhouse for more than 70 years. It had been vacant for more than a decade before Starcity bought it.
There was a lot of interest among lenders for the construction loan.
“Co-living is still a relatively new property type, but we’ve now worked on several of these transactions and are beginning to see increased interest from the lending community,” said Mission Capital’s Matt Polci, who, with Alex Draganiuk and Justin Hunt, secured the loan. “By employing a competitive process in our lender outreach and underscoring Starcity’s track record of success, we were able to generate several strong bids. We ultimately structured this very favorable nonrecourse financing from Ready Capital Structured Finance.”
The building will undergo a complete gut renovation. Construction is expected to be complete in the fall.
Following the pattern of other Starcity properties, the 27,542 SF building will be converted into a fully furnished co-living property with amenities such as community meals, WiFi, 24/7 laundry and cleaning services.
Starcity has 10 Bay Area properties, recently expanded into the Venice Beach area of Los Angeles and has plans for two ground-up co-living developments that will include what the company asserts will be the largest co-living project in the world.
The 55-unit 229 Ellis property will be the company’s largest to date. The project is three blocks from Union Square and near transit.
“We love working with innovative developers, and we’re very proud to participate in Starcity’s efforts to redefine residential living and to create affordable housing alternatives in dynamic neighborhoods in high cost of living cities,” Draganiuk said. “With rental rates climbing across the Bay Area, it’s particularly important for developers to find creative housing solutions, and we’re excited to help Starcity turn 229 Ellis — as well as other projects in their pipeline — into a reality.”
Tenderloin Co-Living Development Secures Construction Financing
February 13, 2019
Mission Capital Advisors arranged $14.5 million of non-recourse financing for 229 Ellis Street in San Francisco’s Tenderloin district. The borrower, Starcity, plans to use loan proceeds to completely transform the 27,542-square-foot property into a co-living community with 55 units.
The historic property was built in 1910, and was operated as a Turkish bathhouse for more than 70 years. After lying vacant for a decade, Starcity acquired the building in March 2018. Starcity communities include a private, fully furnished bedroom, complemented by shared kitchens and living spaces, so residents can be a part of a greater community.
Jillian Mariutti is director of debt and equity finance at Mission Capital Advisors.
(January 29, 2019) — The real estate development process is wrought with an array of potential landmines, and developers embarking on new projects always look for deals with enough upside to compensate for the inevitable snafus along the way. However, a reasonable expectation of upside only exists in a market where the rent-to-income ratio is not out of control.
According to the Department of Housing and Urban Development, individuals and families who spend more than 30 percent of their total household income on housing are classified as “rent-burdened.” And while these metrics are of critical importance to housing advocates and local governments seeking to provide relief to a rent-burdened population, the same numbers are extremely relevant for real estate developers. In cities such as Boulder, Colorado and Tallahassee, Florida – each of which has distinct merits – the upside for multifamily developers is muted, as each market’s median gross rent surpasses 40 percent of the city’s household income. (All figures are based on Governing.com’s metrics, sourced from the U.S. Census Bureau and 2010-2012 American Communities Survey Estimates).
Generally speaking, multifamily developers want to set their sights on cities where that metric is below 30 percent, providing an opportunity to grow rents.
What cities fall in this “sweet spot”? Not surprisingly, markets in some of the country’s fastest-growing regions. For example, Bellevue, Washington – just outside of Seattle – clocks in at a strong 23.9 percent. As the headquarters of Fortune 500 corporations such as T-Mobile and Expedia, Bellevue seems to be a veritable model of stability, where developers can have confidence that a professional workforce will retain its well-paying jobs.
Texas has a number of attractive markets, including the Dallas suburbs of Plano and Frisco, which clock in at 26.4 percent and 25.8 percent. Dallas, Houston and Austin measure in at respectable 29.2, 30 and 31 percent, respectively. The west Texas city of Odessa outperforms all of these markets, with a ratio of 25.2.
Of course, it should be noted that cities that “perform” poorly – i.e. cities with a high rent-to-income ratio – are not necessarily markets that are struggling economically. Like any ratio, the figure can climb to excessive levels based on either a high numerator or a low denominator; in other words, it changes based on either expensive housing or a weak economy. While both sets of markets indicate locales developers will likely want to avoid, they also represent a proverbial tale of two cities, with depressed Flint, Michigan (49.3) on one hand, and gateway markets like Miami (40.0) and Los Angeles (36.8) on the other. While the gateway markets may have booming economies, incomes have not kept up with the pace of housing costs, which has made those cities particularly rent-burdened.
There are a host of factors that go into the decision of where to build, but the ability to add value is one of the most important. While many seek out markets that boast a strong economy or favorable rental rates, one of these alone is not enough to assure success. But by conducting a rigorous analysis – including an assessment of the rent burden in the local market – developers can put themselves in position to reap maximum value from their efforts.
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