Saxon Woods office complex in Mamaroneck, NY

The owners of Saxon Woods, a two-building, 236,000-square-foot office complex in Mamaroneck, NY, will repay $3.5 million of bridge financing, together with substantial early repayment fees. The partnership has earned more than a 14% annual yield on its investment, not counting the impact of the additional fees.

The funds will be reinvested if a suitable investment is identified, according to George S. Perry, senior vice president and director of investments for W&M Properties. Otherwise, the money will be returned to investors, Mr. Perry says.

'Warehouse' Talks Proceeding

Negotiations are underway with a major bank to provide Strategic Capital investors with a low-cost "warehouse" (or standby) line of credit that would be collateralized by the existing investments held by Strategic Capital L.P. and Strategic Capital II L.P. As reported in the fall issue of Real Estate Investor, a warehouse credit line could be used to fund new preferred-equity investments without requiring additional capital from Strategic Capital investors.

As with other real estate sectors, the structured equity and mezzanine markets have attracted additional capital and are more competitive. Prospects for returns on new investments have diminished, but opportunities remain and are being pursued.