Lightstone Value Plus REIT III Acquires Joint Venture in Tiburon, California Apartments

February 7, 2017 | James Sprow | Blue Vault

Lightstone Value Plus REIT III Inc., Lightstone Real Estate Income Trust Inc. and Maximus Cove Investor LLC signed a joint venture agreement to acquire RP Cove LLC’s stake in The Cove at Tiburon, Calif., for roughly $255.0 million, which consisted of $80 million of cash and $175 million of proceeds from a loan from a financial institution. The joint venture secured the $175 million loan due January 31, 2020, with two conditional one-year extension options. The loan carries interest at LIBOR plus 3.85% through its initial maturity and LIBOR plus 4.15% during the extension periods. Lightstone Value Plus Real Estate Investment Trust III paid about $20.0 million for a 22.5% non-managing membership interest in the joint venture.

The Cove is a multi-family complex consisting of 281-units, or 289,690 square feet, contained within 32 apartment buildings over 20.1 acres originally constructed in 1967. As of January 31, 2017, The Cove was 81.5% occupied. The average remaining term for existing leases in The Cove is 4 months and the average rental price per square foot is $4.47. The capitalization rate for the acquisition of The Cove was approximately 3.9%.

Starting in 2013, approximately $38 million has been invested in an extensive refurbishment of The Cove; of which to date, 97% of the apartment buildings have been completed. 

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