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Tuesday, 08 October 2019

Cortland Sees Renovating Half the Portfolio Assumed Through Pure Acquisition

Cortland, which recently completed its $1.2 billion acquisition of Pure Multi-Family REIT, giving it 22 properties with 7,085 units in five Southwestern markets, expects to put about a dozen of the properties it assumed through a comprehensive renovation plan. It's also evaluating the $540 million of mortgage debt it assumed as part of its purchase. Some loans might get replaced.

Commercial Real Estate Direct Staff Report

Cortland, which recently completed its $1.2 billion acquisition of Pure Multi-Family REIT, giving it 22 properties with 7,085 units in five Southwestern markets, expects to put about a dozen of the properties it assumed through a comprehensive renovation plan.

The Atlanta investor, which partnered with a capital source that it didn't identify on the transaction, now owns some 60,000 units in 19 markets. The Pure portfolio effectively increased its concentration of properties in the Dallas/Fort Worth area and doubled its presence in Phoenix.

It's now integrating Pure's portfolio into its own and gearing up to upgrade roughly a dozen of the properties it got in the purchase. As part of its acquisition, Cortland had assumed the $540 million of property-level mortgage debt Pure had carried, as well as a credit facility with an outstanding balance of $55.6 million. It paid off the credit facility and is evaluating the mortgage debt. The plan is to determine whether individual mortgages are accretive to their collateral's profitability or not. If they are, they'll likely be kept in place. If not, they'll likely be replaced.

"We'll go through the loans one-by-one and maximize the value of the existing debt," explained Steven DeFrancis, founder and chief executive of Cortland. The evaluation will involve examining the business plan for each property and determining whether its debt is appropriate or not.

The Pure portfolio included a dozen properties that DeFrancis categorized as value-add opportunities and 10 core-plus properties, meaning they're either nearly new or just a few years old. Of the dozen value-add...





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Data Digest

 

CMBS DELINQUENCY VOLUME

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CMBS SPECIAL SERVICING VOLUME

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Top Bookrunners Domestic, Private-Label CMBS - 2017
Investment Bank #Deals Vol$mln MktShr%
Goldman Sachs 17.59 11,819.34 13.68
JPMorgan Securities 14.52 10,968.11 12.70
Citigroup 12.04 10,012.71 11.59
Wells Fargo Securities 14.02 9,936.06 11.50
Deutsche Bank 12.55 9,879.74 11.44

 

RCA CPPI

 

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CMBS 2.0 Spreads

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Top CMBS Loan Contributors - 2017
Lender #Loans Vol$mln MktShr%
Goldman Sachs 146.89 11,719.34 13.63
JPMorgan Chase Bank 117.68 10,114.14 11.76
Deutsche Bank 198.48 9,689.97 11.27
Morgan Stanley 166.18 8,539.78 9.93
Citigroup 199.05 8,088.24 9.41

 

 

 

REITCafe

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