Hunt Real Estate Capital announced today that it has provided a first mortgage bridge loan in the amount of $67.6 million to finance the acquisition and renovation of a multifamily property located in Virginia Beach, Virginia.
Mayflower Apartments is a high-rise multifamily property located at 205 and 306 34th Street and 3420 Atlantic Avenue. The property is situated on a 2.09-acre site consisting of two contiguous and one non-continuous parcels. Mayflower is a 15-story, elevator residential building comprised of 266 residential units, connected to a three-story parking garage, a single-story commercial building and a satellite parking lot.
The borrower is Lynd Company and VTS Capital Partners, who purchased the property from Harbor Group International. The five-year bridge loan features full-term, interest-only payments.
“Mayflower Apartments was built in 1949 and was renovated in 2015,” noted Marc Suarez, Director at Hunt Real Estate Capital. “As part of the new loan, a future funding facility of $4.6 million was allocated for capital improvements.”
“Immediately following acquisition, the borrower plans to implement on a wide variety of upgrades including the renovation of all 266 unit interiors, exterior upgrades and deferred maintenance,” added Suarez.
“This is a crown jewel in Virginia Beach; there is nothing else like it,” Adam David Lynd, the CEO of Lynd, said in a statement. “With the Mayflower, we see a tremendous opportunity to execute our current strategy of identifying unique properties that are undervalued and craft tailored plans to unlock the value in both rents and occupancies.”
“We have a long history of transacting with Lynd on this type of value-add assets. Taking an older building and bringing some of the amenities up to where a brand new building would be and acquiring it below replacement cost is something that is very attractive to us,” concluded Suarez.
The deal was brokered Newmark Knight Frank, who handled both the sale and financing for both sides. Michael Marshall, Wink Ewing and Carter Wood represented both sides in the sale and Bill Weber and Henry Stimler, also of NKF, arranged the financing.
“Mayflower Apartments are the only high-rise property right off the beach, and the new owners saw the potential in committing to a solid capital improvements plan for the asset,” said Stimler. “To make that a reality, we worked with Hunt Real Estate Capital through Marc Suarez, who provided the financing Lynd needed to realize the full potential of this one-of-a-kind apartment building.”
Full interior unit upgrades ae planned and exterior upgrades and deferred maintenance will include façade repairs, HVAC replacement, signage, parking lot repairs, technology upgrades, office/clubroom upgrades, exterior pool cabana upgrades, and interior pool repairs.
The Property is located between 34th and 35th Streets and Atlantic and Pacific Avenues, along the Virginia Beach boardwalk, ten miles from the Virginia Beach CBD. The city of Virginia Beach is located within the Virginia Beach–Norfolk–Newport News, VA-NC MSA. The largest industries in Virginia Beach are the military, tourism, retail and the agribusiness sector.
Property amenities include an interior pool, exterior pool and spa, storage units, fitness center, dog park, laundry facilities, clubhouse, BBQ/picnic area.