DENVER, CO - JCR Capital (JCR), a Denver-based commercial real estate finance fund manager, announced that it has provided Lexin Capital with $4.872 million for the expedited closing on Veritas condominiums, a 36-unit complex in Scottsdale, Ariz. The project consists of 30 three-bedroom units and six two-bedroom units. The units average 1,918 square feet and all have two-car garages. The project, purchased as REO from a regional bank, is 95 percent complete.
Source: JCR Capital
Lexin will complete interior finishes such as flooring and appliances and will begin actively marketing units within 60 days. Sales prices for the units will be 50 percent below the original sales projections of the prior owner.
According to Jay Rollins, JCR Managing Principal, "We liked the Veritas transaction because of the asset's location, the quality of the asset, our cost basis; and the overall recovery of the Scottsdale market. We also have an existing relationship with Lexin, and we think highly of them as a sponsor."
JCR and Lexin have teamed up on multiple transactions to purchase distressed notes and bank REO. To further facilitate this strategy, they have formed a $15 million joint venture acquisition facility for "quick close" opportunities. The facility allows Lexin to close on transactions in as little as two weeks. This speed provides Lexin a tremendous advantage when working with motivated sellers.
The Veritas acquisition represents the third transaction of the facility. JCR and Lexin are currently seeking more acquisition opportunities and are targeting residential assets, including condos, homes, and residential lots.
JCR's funding of the Lexin acquisition facility is through its JCR Capital Commercial Real Estate Finance Fund I, which provides debt, participating debt, preferred equity and equity to distressed and opportunistic real estate transactions.
Initiated in 2010, JCR's Fund I is now over 75 percent invested and already has had one realization to date, which generated a gross IRR of 83 percent. In addition, JCR recently commenced a new fund, JCR Commercial Real Estate Finance Fund II (Fund II), which has a target capitalization of $100 million, with over $12 million already being invested by JCR shareholders. JCR has tapped Perth Advisors as their placement agent for Fund II.
The JCR funds are managed by Mr. Rollins and Maren Steinberg, a JCR Managing Principal. Since 1992, throughout a variety of real estate cycles, this team has successfully invested approximately $1.8 billion in over 260 middle market commercial real estate transactions across three platforms.
Mr. Rollins and Ms. Steinberg's over 40 years collective experience in underwriting and asset management have helped them avoid many of the pitfalls leading up to the real estate crash.