DENVER — The Bascom Group LLC has received $230 million in financing for The Breakers Resort, a six-village, 1,523-unit community in Denver. Proceeds from the loan were used to refinance the existing mortgage and mezzanine loans, as well as buy out the existing institutional equity partner and cover future renovations.
The Bascom Group, an Irvine, Calif.-based private equity firm, received $165 million in first-mortgage financing, a $26.2 million mezzanine loan and $38.75 million of preferred equity. The $165 million floating-rate loan included a three-year term with two, one-year extension options. Bank of America and CIBC provided the first-mortgage loan.
Prudential Real Estate Investors’ $805 million U.S. Real Estate Debt Fund provided the mezzanine loan and preferred equity. “The overall structure limited the mezzanine financing, making it necessary to fund the remaining portion with preferred equity,” says Charles Halladay, director at HFF.
Situated on 127 acres and developed by Koelbel and Co., which will retain an ownership interest, The Breakers Resort is located at 9099 E. Mississippi Ave.
The multifamily property is 95 percent leased and includes six interconnected communities, each with its own clubhouse, surrounding a 55-acre recreational lake. The property has 14 units per acre and a master clubhouse featuring a large fitness center with views of the Rockies, restaurant, business center, community room and private theater.
The apartment complex has 50 one- and two-bedroom floor plans averaging 1,019 square feet each. Also included with the property is an 18.2-acre apartment development parcel intended for 628 units.
“Bascom was able to access mezzanine and preferred equity capital available in today’s market and obtain financing on The Breakers Resort by adding an additional parcel of developable land as collateral, resulting in a blended cost of capital of less than 5 percent and a combined debt yield of 6.25 percent,” says Mark Erland, director at HFF.
Charles Halladay, Erland, Josh Simon, Jordan Robbins and Lee Redmond led the HFF team representing Bascom Group.
The Bascom Group specializes in value-added multifamily, commercial and non-performing loans and real estate-related investments and operating companies. The company has completed more than $8 billion in multifamily and commercial value-added transactions since 1996, including more than 220 multifamily properties and 60,000 units.