SOURCE: Sycamore Urban Properties

Sycamore Urban Properties

October 03, 2011 13:00 ET

Sycamore Urban Properties Acquires Fractured Condominium Property in Reno, Nevada

SoCal Investor and Developer Plans to Complete Neighborhood and Open for Sale in Spring 2012

RENO, NV--(Marketwire - Oct 3, 2011) - Sycamore Urban Properties, an investment and development company based in Southern California, announced today that it has acquired from U.S. Bank a fractured condominium property named Talus Point in Reno, Nevada.

Originally built in 1978 as a 153-unit apartment community, Talus Point underwent a condominium conversion and sales program in 2006, selling only 28 units before entitlement and market conditions stalled the program. The remaining 125 units have since been operated on a lease basis. The property was foreclosed upon by the original lender in 2009 and subsequently taken over by U.S. Bank in a structured transaction with the FDIC.

"Talus Point provided an excellent opportunity to begin building our Nevada portfolio, which we plan to grow to over 1,000 units," said Mitchell Bradford, president of Sycamore Urban Properties. "With its historically high rate of occupancy and strong cash flow, we have multiple options for this property, either as a long-term hold and/or re-introducing the units for sale when the market warrants."

Sycamore was represented in the transaction by Greg Rutten of GRu Ventures in San Diego. "Since introducing this opportunity in late 2010, Sycamore steadfastly pursued this acquisition, through multiple stages of negotiation and due diligence. Only that kind of patience and perseverance wins out in these kinds of fractured and REO transactions," said Rutten.

Critical to the completion of this transaction was the securing of long-term financing, a difficult prospect at best for fractured condominium properties of this type. Fixed-rate, multifamily debt was provided by Pacific Western Bank of Los Angeles.

Executive Vice President of Pacific Western Bank Scott Hardt said, "We do not typically provide long-term, multifamily debt on fractured condominium assets. However, given Sycamore's track record of success on similar condo and REO properties and the experience and reputation of its executive team, we were able to do so."

The Seller U.S. Bank was represented by Lance Faulstich of Trinity Commercial and Cory Edge of Edge Realty, both located in Reno. "This property was marketed for almost two years. Although it was investigated by multiple potential buyers, only Sycamore had the wherewithal to fully understand all the components of the deal, secure financing and ultimately close on schedule," said Edge.

The 125 Talus Point apartments range from studios to 3 bedroom and 2.5 bathroom townhomes, many of which include private garages. The property is located just one mile from the University of Nevada, Reno. In addition to spectacular views of the surrounding mountains and downtown, the community includes a common area lounge, exercise room and pool facility.

This is the fifth new community acquired by Sycamore Urban, which was formed in 2008 to purchase partially or fully complete distressed condominiums, tract home communities and for-rent residential assets. In its first year of operation, the firm rescued a troubled 41-unit townhome development in Rancho Cucamonga, Calif., which is now fully leased. In 2009, it acquired from the FDIC a distressed asset consisting of 42 vacant single-family homes in Apple Valley -- which it sold to new homeowners within five months -- along with 60 finished lots which were sold to an investor/builder. Sycamore Urban also recently completed its 817 Alfred property, an 18-unit luxury condominium community in the West Hollywood area, which was rescued from failure earlier this year. Finally, Sycamore is currently marketing its Westlake Highlands community of 36 luxury townhomes in Thousand Oaks, CA, another stalled, FDIC acquisition.

Sycamore Urban is currently tracking over $500 million in notes/properties that are either stalled, distressed or in the foreclosure process. The company plans to acquire 1,000 to 2,000 additional units over the next 36 months.

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