Mesa West Capital originates USD165m loan on San Diego luxury apartments

Mesa West Capital has originated USD165 million in short-term first mortgage debt to refinance two new luxury apartment complexes in San Diego, CA developed and owned by Sunroad Enterprises.

The financing was structured in two pieces with Mesa West holding the USD145 million A-Note and New York-based real estate investment advisor Clarion Partners holding the USD20 million B-Note.    
 
Mesa West’s five-year, non-recourse loan is secured by the 253-unit Ariva and the 302-unit Vive on the Park, the two most recent apartment developments in Sunroad’s 40-acre master planned community Sunroad Centrum in the Kearny Mesa submarket.  At build out, Sunroad Centrum will include 1,622 multifamily units and 856,000 square feet of commercial office space. Sunroad Centrum is part of the San Diego Spectrum Center, the redevelopment of the former 232-acre General Dynamics aerospace facility.
 
Ariva, which consists of two four-story podium style buildings, was completed in 2014 and leased up by the sponsor in less than 16 months.  The seven-story Vive on the Park was recently completed and is 52 per cent leased after being on the market only five months.  Both projects have set the standard for top end luxury apartment living in Central San Diego – including top-end construction, upscale amenity packages and contemporary finishes designed to attract the luxury apartment renter.  
 
“The sponsor has done an excellent job in leveraging the portfolio’s quality finishes, high-end and diverse amenity offerings and central Kearny Mesa location in the lease up of these two projects in a very competitive market,” says Mesa West Capital Principal Steve Fried who led the origination team along with Vice President Jason Bressler. “We are confident in their ability to maintain the strong leasing velocity to meet the demand for this type of product in one of the most rapidly developing pockets in San Diego County.”
 
“Clarion Partners was delighted to team up with Mesa West to provide financing on such a high quality apartment project owned and developed by one of the preeminent sponsors in the San Diego area,” says Drew D Fung, Head of Debt Investment for Clarion Partners.”
 
The two residential projects benefit from the many demand drivers for the area, according to Bressler. Located in the centre of San Diego, the area enjoys one of the highest household incomes in San Diego driven by its excellent schools and strong employment base, which includes the corporate headquarters of San Diego Gas and Electric, Northrup Grumman, Kaiser Permanente and Solar Turbines.
 
Tim Wright and Aldon Cole in the San Diego office of HFF arranged the financing.