Walker & Dunlop Miami Duo Closes $59.6 Million Loan for Art Falcone's California Project
Falcone, through a real estate investment trust he leads with Tony Avila and Bill Powers, has embarked on eight multifamily communities in California, Oregon and Florida.
March 12, 2019 at 02:34 PM
3 minute read
Prominent South Florida developer Art Falcone, who has a stake in downtown's Miami Worldcenter, is expanding his ventures on the West Coast.
Falcone's Rescore Property Corp. secured a $59.6 million construction loan for The Rise Walnut Creek apartment project east of San Francisco — with help from a Miami team at Walker & Dunlop. The deal closed Nov. 16, and the development is set to be finished in April 2020.
Rescore Property is a private real estate investment trust founded by Falcone with Tony Avila and Bill Powers. It's developing eight multifamily projects, all under the Rise name, mostly in California and Oregon plus two in Broward County.
Walker & Dunlop managing directors Eric McGlynn and Kevin O'Grady secured the loan for The Rise Walnut Creek and six other Rise projects, in total closing on more than $500 million in financing.
McGlynn and O'Grady also are working to secure construction financing for the latest community. The Rise Plantation Walk is being built at the 27-acre, mixed-use Plantation Walk in Broward County, also a Falcone venture.
Rescore is developing The Rise Walnut Creek along with San Francisco-based Align Real Estate. This will be a six-story, 97-unit building with 10,577 square feet of retail. The average unit size will be 754 square feet renting for an average $3,800 a month.
Walnut Creek, a city of about 70,000, is about 20 miles northeast of San Francisco.
“It's like a bedroom community to San Francisco for a lot of people,” McGlynn said. “It's a desirable community to live in and of itself. You have some people who are working in Walnut Creek itself, and you have some people who are working in San Francisco.”
Of the 97 units, 20 will be for short-term rentals meeting city regulations. The Rise is being built where city zoning requires units that could be rented for less than 30 days.
It's notable Walnut Creek is encouraging short-term rentals since many cities fight bookings through home-sharing platforms like Airbnb.
“It could be corporate housing or, if they wanted to do a different strategy, they could do an Airbnb style as well. As long as it's less than 30 days,” McGlynn said.
Corporate housing is a furnished unit that is rented by business travelers and is similar to an extended-stay hotel.
Barings LLC, a Charlotte, North Carolina-based investment manager owned by MassMutual, issued the five-year nonrecourse loan, including all possible extensions. McGlynn declined to disclose the interest rate. The financing covers 80 percent of the project cost.
Rescore is an investment vehicle in Falcone's Encore Capital Management, the Boca Raton-based real estate and investment company he founded with Avila. Falcone, Avila and Powers are Encore's managing principals and investment committee members, according to the firm's website.
Of the eight Rise communities, seven are under construction, The eighth, the 87-unit The Rise Old Town in Beaverton, Oregon, has been completed. A sister property, The Rise Central, is on tap to be finished in the second quarter.
Rescore's other South Florida Rise apartments include The Rise Flagler Village in downtown Fort Lauderdale's once neglected industrial district.
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