SAN JOSE, Calif., Aug. 29, 2017 – Institutional Property Advisors (IPA) Capital Markets, has arranged $32.5 million in bridge financing for Terra Willow Glen, a 112-unit apartment property constructed in 1979 in San Jose, California. The loan-to-cost was 73 percent.
“The borrower purchased the asset in cash six months prior to exploring value-add financing options,” says Jake Roberts, a senior managing director of IPA Capital Markets. “This is an incredibly unique property, which offers a resort-like setting but has few comps, which can make it more difficult to secure value-add loans given the fact that lenders tend to not want to stretch as much on proceeds if a property isn’t easily comparable to other assets in the market.”
Roberts, along with Anita Paryani-Rice, a first vice president of IPA Capital Markets, arranged the loan on behalf of the borrower, a repeat client.
“Initially the borrower planned to take a lower leverage bridge loan option at lower pricing,” says Paryani-Rice. “But since our team is so active in the market we began to see bridge lenders became more aggressive and pricing compressed, so we encouraged the borrower to look at higher leverage options, which provided much more attractive leveraged returns at the end of the day.”
With a network of senior-level investment advisors located throughout the United States, Institutional Property Advisors (IPA), a division of Marcus & Millichap, is qualified to meet the needs of institutional and major private investors. IPA’s combination of real estate investment and capital markets expertise, industry-leading technology, superior support services and acclaimed research offer customized solutions for the acquisition and disposition of institutional properties and portfolios.