Oak Grove Capital Originates $23M in Minnesota
Oak Grove Capital, St. Paul, Minn., originated $23.3 million for two Minnesota mixed-use developments.
The firm originated a $14 million Fannie Mae Near Stabilization Loan for Boatworks Commons, a mixed-use property in White Bear Lake, Minn. that delivered in early 2015. The fixed-rate loan refinanced the property’s construction loan.
Under the new Fannie Mae Near Stabilization Program, sponsor At Home Apartments locked rate and fully funded the loan with the property at 60 percent occupancy rather than the usual 90 percent occupancy requirement. Oak Grove Capital Vice President Scott Streiff said At Home Apartments expects to obtain stabilized occupancy at a 1.25x DSCR within 120 days of rate lock.
Streiff said he overcame hurdles including a reciprocal easement agreement “and a registered land survey that needed to be negotiated and approved in order for us to close and secure the 10-year term loan with three years of interest only and a 75 percent LTV.”
Boatworks Commons represents the newest development in White Bear Lake and the only multifamily property on the lake. The site includes 85 apartment units, a boat dock area, a sheltered public plaza a public community room and bathrooms. Because the property consists of both private and public spaces, At Home Apartments worked with the City of White Bear Lake while developing the site and the city contributed funds to build the public property’s public spaces.
“Fannie Mae’s new Near Stabilization Program was a good fit for our project since we were still leasing up and the program allowed us to rate lock earlier than other refinancing options we researched,” said Leanna Stefaniak, director of business development and general counsel with At Home Apartments. “Securing a long-term, fixed-rate loan early in the stabilization process is key to the financial success of a new asset.”
Oak Grove also originated a $9.3 million FHA construction loan for Broadway Flats, a North Minneapolis mixed-use property. Vice President Pat McMullen and Managing Director Ken Dayton arranged the loan. The property will include commercial space and workforce housing in an effort to revitalize the community, Dayton said.
“This particular community in North Minneapolis has needed renewal and a strong investor since being hit by a tornado in May of 2011.”
The project, which broke ground on May 27, will open its 19,000 square feet of ground-floor commercial space in April 2016, followed by 103 housing units on three floors next summer.
