By Kate Snyder
As part of a larger strategy to decrease its footprint along the West Coast, a San Mateo-based company refinanced three properties in San Carlos, Belmont, Calif., and Redmond, Wash., in a $51.8 million cash-out deal, according to information from Highland Realty Capital, which arranged the agreements.
Jeff Eliason, principal, and Leland Ortega, senior vice president, handled the transaction for Highland Realty Capital on behalf of the property owner, G.W. Williams Co (GWW).
The three properties were the 240,000 square foot Williams Business Park at 299 Old County Road in San Carlos, the 52,000 square foot Harbor Business Center at 101-131 Industrial Road in Belmont and the 150-unit Peloton Apartments at 7435 159th Place NE in Redmond.
For the California properties, Highland structured a cash-out of approximately $23.8 million, and for the Washington property, Highland arranged a cash-out refinance of $28 million.
Eliason said GWW is geographically repositioning much of its apartment portfolio by selling properties in California and Washington to acquire larger, newer properties in the southeastern United States. The new loans for the recently refinanced properties were fixed at rates in the four percent range, he said, locking them in before much of the market increase in interest rates took hold, and that money ultimately went toward purchasing a 389-unit, brand new trophy property in Orlando, Fla.
“We were very happy to work with G.W. Williams once again to capitalize a signature acquisition in Orlando, in part by helping access the cash needed given the Florida asset’s lease-up situation and the turbulent market,” Eliason said. “The cash-out California/Washington portfolio recapitalization worked out very well, as we were able to lock in attractive fixed rates, waive a costly prepayment penalty, and critically close a few days before the funds were needed for the acquisition.”
GWW’s long-term strategy is based upon the firm’s desire to both move away from the rent control and other regulations in California and to invest in the high-growth markets in the southeast, Eliason said. The company has already traded into assets in Nashville, Jacksonville and Orlando and it is actively evaluating opportunities in Charlotte and Raleigh, N.C.
GWW is a fourth generation, privately-held real estate investment company based in San Mateo. The company owns multifamily, light industrial, commercial and office properties totaling about 3,000 units of residential and one million square feet of commercial in addition to developable land. It operates in the United States and Europe with holdings in California, Washington, Arizona, Tennessee, Florida and Switzerland.
Highland Realty Capital was founded in 2005 with offices in northern and southern California and arranges debt, mezzanine and equity capital for all types of commercial real estate, including for ground-up developments, value-add acquisitions, recapitalizations and stabilized refinancings.
