BETHESDA, Md.— Walker & Dunlop, Inc. announced today that it structured $25,000,000 in financing for the Westkin Portfolio, an 810-acre collection of sub-ground leases with more than 2,000 individual condominiums and businesses. Located in Cathedral City, California, the portfolio includes subleases for several income-producing companies such as the Desert Princess Country Club, a DoubleTree hotel, the Welk Resort, the Cathedral Canyon Country Club, and an Extra Space self-storage property.
Led by Mark Strauss and Rob Quarton of Walker & Dunlop’s Capital Markets group, the team structured a 20-year, self-amortizing loan on behalf of the property owner and repeat-client, Shopoff Realty Investments, Inc. The financing replaces a short-term acquisition bridge loan and facilitates the owner’s business plan, which includes modernizing operations to reduce expenses.
Strauss and Quarton played a critical role in this transaction, utilizing their deep financing expertise to ensure the property’s ground lease was consistent with lending requirements. This laid the foundation for a timely and efficient closing process of fewer than 20 days. The terms of the refinance included a debt service coverage ratio of 1.15x and an attractive rate.
The property is conveniently located in Coachella Valley and borders Palm Springs and Rancho Mirage. Originally established as an agricultural region and winter vacation area known for hot springs, trendy hotels, golf courses, and spas, the Coachella Valley now has a substantial permanent resident population and a diverse year-round economy. Cathedral City, in particular, has seen unprecedented employment growth, with several businesses expanding or relocating to the area over the past several years.
William Shopoff, President and CEO of Shopoff Realty Investments, Inc., stated, “We are very pleased with Walker & Dunlop’s execution, network of capital, and expertise in financing unique collateral. They understood how the nature of the portfolio’s long-term cash flow replicated a bond investment structure and focused their solicitation on lenders that understood this aspect of the collateral.” Adding that, “the project has a 40-year history of an uninterrupted stream of payments, as well as appropriate financial incentives to potentially continue for the next 40 years or more.”
Said Mr. Quarton, “The property has strong, stable, and predictable cash flow, which was very attractive to the capital markets. Though the Westkin Portfolio attracted considerable attention, this complex transaction required diligence, attention to detail, and coordination amongst several parties to facilitate a smooth transition from the existing loan.”
Walker & Dunlop is a leader in the commercial real estate finance space and has rapidly grown its Capital Markets group over the past several years. The company completed $8.6 billion in brokered loan originations in 2018, a 17 percent increase in volume from 2017. To learn more about our broad range of financing options, visit our website.
About Walker & Dunlop
Walker & Dunlop (NYSE: WD), headquartered in Bethesda, Maryland, is one of the largest commercial real estate finance companies in the United States. The company provides a comprehensive range of capital solutions for all commercial real estate asset classes, as well as investment sales brokerage services to owners of multifamily properties. Walker & Dunlop is included on the S&P SmallCap 600 Index and was ranked as one of FORTUNE Magazine’s Fastest Growing Companies in 2014, 2017, and 2018. Walker & Dunlop’s 700+ professionals in 29 offices across the nation have an unyielding commitment to client satisfaction.
About Shopoff Realty Investments
Shopoff Realty Investments is an Irvine, California-based real estate firm with a 27-year history of value-add and opportunistic investing across the United States. The company primarily focuses on proactively generating appreciation through the repositioning of commercial income-producing properties and the entitlement of land assets. The 27-year history includes operating as Asset Recovery Fund, Eastbridge Partners and Shopoff Realty Investments (formerly known as The Shopoff Group). Performance has varied in this time frame. For additional information, please visit www.shopoff.com or call (844) 4-SHOPOFF.