Right Buyer Produced for The Missions at Rio Vista
A fractured condominium project presents two common challenges in almost every case: limited financing opportunities as compared to a traditional apartment community, and added operational complexity due to an existing homeowners' association. These challenges can greatly reduce the number of prospective purchasers that are interested in or even capable of pursuing such an acquisition.
The buyer in this case must have the management expertise to co-exist with a homeowners' association that will play a significant role in the decision-making process with respect to property operations. Additionally, a buyer will likely require close existing relationships with lenders that are willing to provide attractive financing for such a deal, as agency debt is not currently available for a fractured condo project.
We were able to produce a buyer for the property that was more than capable of working through the challenges stated above. Their management expertise was unquestioned as they self-manage one of the largest apartment portfolios in the county of approximately 7,000 units. They additionally proved to be capable of financing very similar product as they had recently acquired two other significant fractured condo projects, both financed through a close banking relationship. The 316-unit property traded for $77 million and without a doubt was completed due to the careful selection of a purchaser that had the legitimate wherewithal to finish an unconventional and complex transaction.