Sale Marks One of the Largest Educational Property Transactions

PHOENIX, Arizona – A portfolio of five charter school properties in Florida has been sold for $71.48 million.  The transaction is one of the country’s largest educational-based property deals, striking a new level of prominence for this category of commercial real estate.

“This marks a watershed moment in the educational asset sector,” says Todd Noel, Executive Vice President and National Director Education Services Group.  “This sale helps to validate education-occupied properties within the institutional asset category of commercial real estate.”

Noel, who is based in Phoenix, and Miami-based Colliers agent Achikam Yogev handled the sale transaction.  ESJ Capital Partners of Aventura, FL sold the five schools to Charter School Capital of Portland, OR.

The portfolio includes the following charter school properties:

• Imagine South Vero – 6000 4^th St. in Vero Beach, FL
• Imagine School at Broward – 9001 Westview Dr. in Coral Springs, FL
• Championship Academy of Distinction Davie Campus – 3367 N. University Dr. in Davie, FL
• Renaissance Charter School at Plantation – 6701 W. Sunrise Blvd. in Plantation, FL
• Kids Community College – 10030 Mathog Rd. in Riverview, FL

The five schools are located in highly desirable growth markets and are operated by highly recognized charter school organizations.  Florida is a national leader in school choice and the charter school environment shows no indication of slowing down.  Charter schools are tuition-free public schools created through an agreement or “charter” typically between the school and the local district school board.  During 2015-16 school year, more than 400 new charter schools opened.  Charter school enrollment in Florida grew by almost eight percent from fall 2015 to fall 2016, demonstrating growing parental demand for high-quality educational options.

The five schools had an average of 17 years remaining on current lease commitments.  The properties range in size from 2.06 acres to 17.4 acres.  Property under-roof square footage ranges from 46,418 square feet to 74,992 square feet.

Charter School Capital is the nation’s leading provider of funding for charter schools, including growth capital and facilities financing.  Charter School Capital has provided in excess of $1 billion in funding for charter schools, providing high-quality education to more than 550,000 students across the united states.

BW RRI IV, LLC, a partnership between a Singapore investor and Westmont Hospitality has won the bidding for a Red Roof Inn portfolio which contains 89 hotels with 10,715 rooms. Their winning bid of about $600 million ($55,996 per room) beat out runner-up Blackstone, which wanted to convert the properties to its Motel 6 brand.

Five Mile and Westmont put the portfolio up for sale this past December via Eastdil Secured. Westmont wanted to stay in the investment, so it teamed up with the unidentified Singapore investor to make an offer on the portfolio.

The sale enables majority partner Five Mile Capital to cash out and Westmont to retain a minority stake and continue to operate the portfolio.

There were two Tucson Red Roof Inns that sold in the transaction, the 118-room hotel at 3704 East Irvington Road (near Tucson International Airport) in Tucson for $2.89 million ($24,450 per room) and the 133-room hotel at 4940 West Ina Road in North Tucson for $2.95 million ($22,208 per room).

Five Mile Capital Partners of Stamford, Conn and Montreal-based Westmont Hospitality Group took over 143 Red Roof hotels in 2011 after the Red Roof chain defaulted on debt. Four years ago, they financed the purchase with a $275 million floating-rate loan from Starwood Property and Fortress Credit, and then plowed $70 million into improvements.

After the partnership sold 20 of the properties, Starwood and Fortress agreed to modify the loan in 2013, increasing its size to $285 million and extending its term by two years, to August 2015, plus three one-year extension options.

The senior $200 million portion of the modified loan, then backed by 123 hotels, was securitized via a stand-alone deal led by Wells Fargo. That loan, whose total balance has paid down to $235.9 million, will be retired in conjunction with this sale.

Barclays will finance the purchase with $450 million of floating-rate debt package that has a two-year term, with three one-year extension options. The bank will divide it into senior and mezzanine portions whose sizes are still being determined. Barclays will securitize the senior portion in a stand-alone deal and place the junior debt with high-yield investors.

Since the 2013 financing, Five Mile and Westmont has sold off an additional 33 hotels, reducing the portfolio to 90 properties and one more hotel remaining for sale.

For additional information log in and refer to RED Comp #2938 and #2932.

Prestige Assisted Living at 1175 S Abrego Drive in Green Valley, Arizona changed hands for $13.9 million ($178,205 per unit) in a portfolio of eight properties to Ventas, Inc. of Chicago, Ill. Prestige will continue to operate the facility under the name of Prestige Assisted Living of Green Valley.

The 39,812-square-foot Green Valley facility (built 2000) has 60 assisted care apartments and 18 memory care units situated on 5.71 acres. Surrounded by golf courses and pecan orchards. The community is conveniently located 25 miles south of Tucson and minutes away from Madera Canyon where sightings of rare Golden Eagles and Peregrine falcons are commonplace.

Amenities include a beauty salon, garden and private dining rooms for gatherings with family and friends. Scheduled transportation is also included, but it’s our events calendar full of fun activities within the community that might surprise you. From movie nights and happy hour to resident sing-alongs, we aim to help residents enjoy life and receive the personal care they need. We offer a selection of spacious studio, one- and two-bedroom apartments that feature kitchenettes with full-size refrigerators and microwave ovens, private baths with barrier-free showers, wall-to-wall carpeting, high-speed Internet and a 24-hour emergency call system. Green Valley also offers our Expressions Memory Care program for individuals with special needs caused by memory loss.

Ventas, Inc. (NYSE: VTR) an S&P 500 company, is a leading real estate investment trust. Its diverse portfolio of more than 1,500 assets in the United States, Canada and the United Kingdom consists of seniors housing communities, medical office buildings, skilled nursing facilities, hospitals and other properties. Ventas provides management, leasing, marketing, facility development and advisory services to highly rated hospitals and health systems throughout the United States. More information about Ventas can be found at www.ventasreit.co

See RED Comp #2296 or login here for more information.

[mepr-show rules=”58038″] Sale date: 12/8/2014. We were unable to determine the aggregate price of the portfolio however, buyer reported that purchase price was determined based on an analysis of estimated aggregate cash flow of the total enterprise as a going concern and other factors rather than through a property by property valuation. Individual property price allocations were made base on investment and other criteria and include the real property, tangible and intangible property value. $9,115,000 of the purchase price was allocated for personal property at the facility. APN: 304-27-001X[/mepr-show]