Mission Capital Advisors announced that its Debt and Equity Finance Group has arranged $21.7 million of financing on behalf of real estate investment firm Raith Capital Partners. The figure comprises two separate loans: $10.5 million in first-mortgage financing for the renovation of Avera Commerce Center, an industrial complex in Stafford, Texas; and $11.18 million of first-mortgage financing for the recapitalization of The Centre at La Quinta, a shopping center in La Quinta, California.
In both transactions, Mission Capital’s team of Ari Hirt, Steven Buchwald, Eugene Shevaldin, Lexington Henn and Will Sledge represented Raith, which specializes in acquiring undervalued commercial real estate assets.
Raith, which acquired Avera Commerce Center all-cash in 2016, will use a portion of the $10.5-million, non-recourse loan to add value to the 16-building complex through capital improvements, including the renovation of roofs, replacement of HVAC units and various cosmetic improvements.
“Since acquiring Avera Commerce Center last year, Raith has done an impressive job of attracting tenants to a property that was previously underutilized and under-leased,” Hirt said. “Even though the property has underperformed since the recession, we fielded bids from various lenders that saw the potential in Raith’s plan for the complex. While the in-place rents are below market, the company has already been able to increase average base rents by over 15 percent since the acquisition.”
Hirt added: “Lenders see this asset class as a safe bet at this stage of the cycle, and there’s even capital available for somewhat challenged properties if the sponsor has a compelling business plan.”
Located at 3928-4012 Bluebonnet Drive, Avera features a highly diverse roster of tenants. The 249,823-square-foot property is situated less than a mile from the entrance to the Southwest Freeway (Highway 59/I-69), a major thoroughfare that connects the property to Downtown Houston and all other major highways serving the metro. Each of the buildings at Avera have minimum clear heights of 14 feet and ample grade-level loading. Constructed between 1995 and 2004, the buildings are situated on a 14.56-acre, well-landscaped parcel.
“With this property situated in one of the country’s strongest industrial markets, we were able to highlight its growth potential and structure a strong interest-only bridge loan with very high leverage,” said Shevaldin. “This is the second deal we’ve done for Raith Capital, and with their track record of turning around properties that were previously somewhat challenged, we’ve been successful at attracting interest from a range of capital providers who understand their value-add strategy.”
The 79,795-square-foot The Centre at LaQuinta property, which is 87-percent occupied, is shadow-anchored by a Walmart Supercenter, and is home to prominent retailers such as Marshalls, PetSmart, GameStop, UPS and Sprint.
“The Centre at LaQuinta is situated on one of the main retail drags in the Coachella Valley, and its stable of premier tenants made it very attractive to capital providers,” said Henn. “The sponsor ultimately acquired the property at a very low basis, and this enabled us to structure a permanent, fixed-rate loan at very attractive terms.”
The shopping center is located in California’s Coachella Valley, which has approximately 600,000 residents and an average household net income of approximately $118,000. With its warm climate, the area sees its population increase significantly during the winter months, a trend that has driven up home prices in recent years.
About Mission Capital Advisors
Founded in 2002, Mission Capital Advisors, LLC is a leading national, diversified real estate capital markets solutions firm with offices in New York City, Florida, Texas, California, and Alabama. The firm delivers value to its clients through an integrated platform of advisory and transaction management services across debt, mezzanine, and JV equity placement; commercial and residential loan sales; and loan portfolio valuation. Since its inception, Mission Capital has advised a variety of leading financial institutions and real estate investors on more than $65 billion of financing and loan sale transactions, as well as in excess of $14 billion of Fannie Mae and Freddie Mac transactions, positioning the firm strongly to provide unmatched loan portfolio valuation services for both commercial and residential assets. Mission Capital’s seasoned team of industry-leading professionals is committed to achieving clients’ business objectives while maintaining the highest levels of integrity and trust. For more information, visit www.missioncap.com.
