NY firm acquires Wolf Creek Apartments in Jonesboro for $12 million

New York-based Hillcrest Acquisitions has acquired Wolf Creek Apartments in Jonesboro for $12 million. The 192-unit multifamily property, located on Caraway Road, has served as student housing for attendees of Arkansas State University. The property is now being converted to a commercial multifamily site.

A timeline for morphing the property from one that caters to college students to one that caters to families was not released.

Eastern Union ‘s senior managing director Marc Tropp was able to acquire the financing for the deal, according to a statement from the firm. Tropp secured a five-year mortgage with 24 months interest-only payments during renovations and lease-up. Once leased up, the mortgage converts to a principal-and-interest payment based on an amortization period of 25 years. The transaction carries a 65% loan-to-cost ratio. The lender was Bay Vanguard.

The overall budget for the project was $17.79 million. Total renovation costs amount to $4.4 million. The remaining money will be applied to closing costs and soft costs.

“This was a complex and challenging transaction that required the services of a talented and experienced broker like Marc Tropp,” said Abe Bergman, president and co-founder of Eastern Union. “Few banks would be prepared to take on the multiple risks associated with this deal. But Mr. Tropp’s excellent and far-reaching relationships with the banking community enabled him to find a suitable lender.”

Built in 2008, Wolf Creek consists of eleven three-story buildings standing on a 13-acre parcel. The site’s 192 units comprise 136 three-bedroom units and 56 with two bedrooms. The average unit size is 1,050 square feet.

“This unusual and difficult deal began with a stabilized property with a healthy cash flow, followed by the removal of that cash flow and the assumption of risk associated with renovation, and, finally, the assumption of additional risk associated with a new lease-up,” said Tropp. “Numerous banks declined to take on this transaction. Having built trusting relationships with many lenders over nearly two decades, however, I was gratified to have succeeded in identifying a willing banker.”