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Debt & Equity

Advalurem recaps prime multifamily complex

New York-based Advalurem Group has completed a preferred equity investment in Bella Madera at Lake Lewisville in Lewisville, Texas.

The 612-unit, Class A, garden-style apartment community is located in one of the fastest growing areas of Dallas.

Advalurem initially completed a common equity investment with its partner, BRES, after the partnership purchased Bella Madera at Lake Lewisville in 2013.

At the time of acquisition, the partnership assumed an existing first mortgage loan and secured preferred equity financing from a financial institution.

At the current market value of $65.6 million, the venture refinanced the property concurrently with the recapitalization of the partnership.

GABRIEL POZO
GABRIEL POZO

The firm’s understanding of the Dallas market, having sold an asset in the same market and proactively seeking to add value to the venture, enabled it to capitalize on this new opportunity.  “Advalurem was the logical capital partner for this investment as we were already in the common equity, we had proposed the recapitalization to the venture, and the transaction size fit well with our mid-market strategy,” said Gabriel Pozo, principal and founder of Advalurem Group.

As part of the recapitalization, Advalurem Group funded the balance necessary to pay off the preferred equity holder.

The recapitalization of the partnership effectively increased Advalurem’s ownership stake and voting rights in the management of the property.

“Not many investment managers are willing to commit to a transaction of this size, let alone invest at different points of the equity capital structure,” added Fred Scott, principal of Advalurem Group.

Built in 2009, Bella Madera has an occupancy of 96 percent. The Tuscan-designed buildings have resort-style amenities.

Advalurem Group is a privately held investment and asset management firm that specializes in middle-market real estate. Since its formation in 2011, Advalurem Group has invested in $250 million of commercial properties.

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