The Bascom Group, LLC has successfully completed a $235 million refinance of an 11-property multifamily portfolio spanning five states. All of the properties are part of Bascom’s third fully discretionary fund, Bascom Value Added Apartment Investors III, LLC. Most of the new loans are interest-only with spreads over LIBOR ranging from 180 bps to 200 bps and interest only periods of 24-36 months. The refinanced properties include The Square Apartments in Downey, CA, Camden Village Apartments in Fremont, CA, Del Flora Apartments in Redlands, CA, Courtyard on 68th Apartments in San Diego, Juniper Terrace Apartments in Escondido, CA, Southtown at Main Apartments in Santa Ana, CA, 52nd Marketplace in Arvada, CO, Prescott Lakes Senior Apartments in Prescott, AZ, McKinney Orchid Apartments in McKinney, TX, Fifty 101 and Lyric Apartments, both in Las Vegas, NV.
Bascom worked with several capital market partners and lenders to complete the refinancing. Brian Eisendrath and Annie Rice from CBRE, Charles Halladay and Jamie Kline from JLL, and Tom Sherlock and Erich Pryor from Talonvest arranged the debt financing. Five loans were provided by Comerica Bank, two from Silvergate Bank, and one loan each from TCF Bank, New York Life, Citizens Business Bank, and Texas Capital Bank. The refinance produced over $39 million in additional loan proceeds, a 76 bp reduction in overall interest rate spreads, and 16% decrease in portfolio debt service payments.
“Overall, the refinances have dramatically improved the debt structure for our entire portfolio,” said Bascom’s Senior Principal, Chad Sanderson. “Over that past seven months, we have seen a tremendous shift in the capital markets. Both interest rate spreads and the indices have moved dramatically lower. This change allowed us to cash out a significant portion of equity, yet still improve our projected cash-on-cash returns.”
“In addition to preserving several key current lender relationships, the recent refinances have provided us with several new lending relationships that we look forward to strengthening over the long-term,” adds Lee Nguyen, Senior Vice President Operations for Bascom. “Additionally, with the debt portion of the capital stack addressed, we can direct our attention to our constant goal of improving operations and sourcing new acquisitions.”
James D’Argenio, Senior Principal, comments, “Our lending partners at Comerica, Silvergate, TCF Bank, New York Life, Citizens Business Bank, and Texas Capital Bank enabled us to extend our debt term with minimal upfront costs, as well as preserve maximum flexibility to sell the assets with little to no prepayment penalties or lockout periods. We believe these favorable terms will allow us to continue maximizing value for our investors.”
About Bascom: Bascom is a private equity firm specializing in value-added multifamily, commercial, and non-performing loans and real estate related investments and operating companies. Bascom sources value-added and distressed properties including many through foreclosure, bankruptcy, or short sales and repositions them by adding extensive capital improvements, improving revenue, and reducing expenses by realizing operational efficiencies through implementation of institutional-quality property management. Bascom, founded by principals Jerry Fink, David Kim, and Derek Chen, is one of the most active and seasoned buyers and operators of apartment communities in the U.S. As of June 15, 2019, Bascom had completed multifamily transactions totaling $15.5 billion since its formation in 1996. This total transaction volume includes the acquisition of 323 multifamily communities, comprising 84,306 units, for an aggregate acquisition cost of $8.6 billion and the disposition, including sales and foreclosures, of 246 multifamily communities, comprising 67,021 units, for an aggregate sales price of $6.9 billion. Bascom currently operates a portfolio, which is owned by Bascom and the funds it has sponsored, of 77 multifamily communities, totaling 17,285 units, in thirteen states. Bascom has ranked among the top 50 multifamily owners in the U.S. Bascom’s subsidiaries and joint ventures include the Southern California Industrial Fund, Rushmore Properties, Bascom Portfolio Advisors, Shubin Nadal Associates, Spirit Bascom Ventures, REDA Bascom Ventures, MHF RM Holdings, Bascom Northwest Ventures, Bascom Arizona Ventures, Harbor Associates, Village Venture Partners, Bascom Milestone Ventures, and the Realm Group. Bascom’s subsidiaries also include Premier Business Centers, the largest privately held executive suite company in the U.S. For additional information, please visit www.bascomgroup.com.
