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VOL. 130 | NO. 3 | Tuesday, January 6, 2015

The Preserve at Southwind Sells for $28 Million

By Amos Maki

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7991 Capilano Drive
Memphis, TN 38125

Sale Amount: $28 million

7991 Capilano Drive • Memphis, TN 38125

Sale Date: Dec. 22, 2014
Buyer: Southwind Apartments LP
Seller: G&I VII Preserve at Southwind Apartments LP
Loan Amount: $18 million
Loan Date: Dec. 18, 2014
Maturity Date: Oct. 31, 2020
Lender: Jackson National Life Insurance Co.
Details: A team that includes Memphis-based Foegelman Venture Partners has sold The Preserve at Southwind apartment community for $28 million.

G&I VII Preserve at Southwind LLC, a joint venture between Rick and Mark Fogelman and New York-based DRA Advisors LLC, sold the 306-unit complex to Colorado-based Preserve at Southwind Apartments LP, an affiliate of Continental Realty Advisors Ltd., according to a Dec. 22 warranty deed. The sellers acquired the property for $22.1 million in 2011.

The $28 million purchase price breaks down to almost $92,200 per unit. The buyer filed an $18 million loan with Jackson National Life Insurance Co. in association with the purchase, according to a Dec. 18 deed of trust.

Located at 7991 Capilano Drive, just north of Tenn. 385 on Hacks Cross Road, the apartment community was built in 2000. The Shelby County Assessor of Property’s 2014 appraisal is $21.1 million.

The Fogelmans and DRA have been busy lately. The group recently purchased the Brook Chase Apartments in Germantown for $31.1 million and will rebrand the community as The Retreat at Germantown.

495 N. Watkins St.
Memphis, TN 38104
Loan Amount: $80.5 million

Loan Date: Dec. 9, 2014
Maturity Date: Dec. 30, 2019
Borrower: Crosstown Building Owner LLC
Lender: SunTrust Bank
Details: The Crosstown development team has secured an $80.5 million loan on the property.

Crosstown Building Owner LLC filed the loan with SunTrust Bank, according to a Dec. 30 deed of trust. McLean Wilson, the Crosstown development team’s co-leader, signed the trust deed.

The Crosstown team is seeking to redevelop the vacant Crosstown building, constructed in 1927, through arts, education and health care. The plans also include around 260 apartments and some retail at the 86-year-old structure at 495 N. Watkins St.

The project includes St. Jude Children’s Research Hospital, ALSAC (the fundraising arm of St. Jude), Crosstown Arts, Gestalt Community Schools, Memphis Teacher Residency, Methodist Le Bonheur Healthcare, Church Health Center and Rhodes College as founding partners that have pledged to be tenants in the redeveloped building.

Other tenants recently include Christian Brothers University; the Southern College of Optometry; VO2 Networx, a Memphis-based information technology company; and Goodwill Excel Center, which plans to open a charter school there.

Staley Cates – the president and chief investment officer of Southeastern Asset Management Inc. – and his wife, Elizabeth, bought the property in 2007 and donated it to Crosstown Building Owner LLC. Any and all profits from the project will be put back into the development.

The 1.5 million-square-foot building, used by several generations of Mid-Southerners, was a painful eyesore for years. The Sears retail store closed in 1983, and the distribution center was shuttered a decade later, leaving an empty shell hovering over the neighborhood.

4366 Malone Road
4406 Malone Road
4436 Malone Road
Memphis, TN 38118

Sale Amount: $7.2 million

Sale Date: Dec. 18, 2014
Buyer: Colfin Cobalt I-II Owner LLC
Seller: Cobalt Industrial REIT II
Loan Amount: $5.1 million
Loan Date: Dec. 15, 2014
Lender: General Electric Capital Corp.
Details: A Texas-based real estate investment trust has sold three Memphis properties for $7.2 million.

Cobalt Industrial REIT II, an affiliate of Cobalt Capital Partners, has sold the properties at 4366, 4406 and 4436 Malone Road to Colfin Cobalt I-II Owner LLC, an affiliate of Santa Monica, Calif.-based Colony Financial Inc., according to a Dec. 18 special warranty deed.

In conjunction with the purchase, Colfin Cobalt filed a $5.1 million loan with General Electric Capital Corp., according to a Dec. 15 deed of trust.

The property at 4366 Malone is a 153,376-square-foot Class B warehouse built in 1979. The property at 4436 Malone is a 248,016-square-foot Class B warehouse built in 1980. The third property appears to be two acres of vacant land. The address listed on the special warranty deed does not match the address maintained by the Shelby County Assessor of Property.

The assessor’s combined 2014 appraisal for the three properties is $6 million.

4836 Hickory Hill Road
Memphis, TN 38141

Sale Amount: $14.5 million

Sale Date: Dec. 23, 2014
Buyer: SIR Properties Trust
Seller: Crown Memphis Associates LLC
Details: A large distribution center in Southeast Memphis has traded hands for $14.5 million, and it’s another out-of-state real estate investment trust doing the buying.

Crown Memphis Associates LLC sold the distribution center at 4836 Hickory Hill Road to SIR Properties Trust, an affiliate of Massachusetts-based Select Income REIT, according to a Dec. 23 warranty deed. Select Income REIT primarily owns properties that are net leased to single tenants. Around 35 percent of SIR’s rents are from land the company owns in Hawaii that is under long term lease to clients with the remaining revenues coming from single-tenant office and industrial properties across the U.S.

SIR acquired a 640,640-square-foot Class B distribution center built on 28 acres in 1984. The Shelby County Assessor of Property’s 2014 appraisal is $11 million.

REITs have continued to show interest in Memphis industrial properties.

In late December, an affiliate of Santa Monica, Calif.-based Colony Financial Inc. acquired three industrial buildings from Cobalt Capital Partners for $7.2 million.

PROPERTY SALES 62 288 2,619
MORTGAGES 52 197 1,783