Reprinted from: Real Estate Finance and Investment
August 31, 2003
New York-based T-Rex Capital is shifting its focus to include debt and value-added multifamily property acquisitions. The company previously targeted just office, multifamily, retail and telecom properties but opportunities have been thin over the past six months, said Thomas Mulroy, ceo.
The company recently purchased a $6 million mezzanine loan from Credit Suisse First Boston, an acquisition that is characteristic of the secondary market debt transactions it targets. In addition to mezzanine loans, T-Rex will buy B-pieces and distressed debt. Mulroy said that the company stays away from newly originated loans because the market is very competitive and the yield is often depressed. On the multifamily side, the company is looking to buy properties throughout the United States, especially in areas in which vacancies are rising.
The CSFB loan is part of a $22 million securitized first mortgage, which is backed by the 430-unit Kingston Villas Apartments in Katy, Texas. The property is 93% leased. T-Rex pairs up with large institutional buyers for property acquisitions and development and targets acquisitions of $20-500 million. Average leverage used is 70-90% and the company targets internal rates of return of 20%. Besides New York, the company has regional offices in Washington, D.C. and Boca Raton, Fla.