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Category ArchiveFannie Mae

Atlanta REIT Broadtree Seals $100M Credit Facility, Eyes Expansion

Real estate investment trust Broadtree Residential has lined up a $100 million line of credit from J.P. Morgan Chase, according to an announcement from the firm.

Broadtree, which boasts a portfolio of five Atlanta-area multifamily developments totaling more than 1,500 apartments, aims to use the funds to bolster balance-sheet flexibility as it looks to expand beyond Georgia’s state lines.

In the past, Broadtree “had predominantly financed our assets with government-sponsored entity debt,” said Ryan Albano, Broadtree’s chief financial officer, referring to loans secured by agencies like Fannie Mae and Freddie Mac. “That’s certainly attractive from a cost-of-capital perspective, but we wanted to create some balance-sheet flexibility and get this line in place so that as we grow in scale, we can eventually migrate into the unsecured borrowing market.”

J.P. Morgan’s credit facility will be available for Broadtree at a floating interest rate above Libor, with adjustments built in depending on assets’ leverage profiles, Albano said. The balance sheet flexibility it provides should help on two fronts.

First, it could grant the REIT the financial ammunition to contemplate a northward expansion.

“We’re predominantly a Southeast-focused private REIT, with all of our office assets today in the Atlanta market. But we’re considering opportunities that stretch up into the Mid-Atlantic,” Albano explained.

Second, the balance-sheet flexibility the facility provides could go a long way toward bolstering Broadtree’s credibility when it comes to closing deals.

“I think it has benefits from a surety-of-close perspective,” Albano said. “Sellers in an acquisition, they want to know that the buyer is ready and willing to close. It will certainly help us as we’re making offers.”

A representative from J.P. Morgan Chase declined to comment on the deal.

Source: commercial

Principal Financial Lends $25M on Downtown LA Apartment Complex

Quantum Capital Partners has secured $25 million in long-term, fixed-rate debt to refinance a 130-unit apartment complex located near the University of Southern California (USC) in Downtown Los Angeles on behalf Park City, a South El Monte, Calif.-based investor and management company, according to Kevin Wong, an assistant vice president at Quantum.

Principal Financial, an insurance company headquartered in Des Moines, Iowa, provided the refinancing for City Park Apartments, two four-story multifamily buildings located at 1246 and 1247 West 30th Street. Located two blocks from USC, the buildings feature a mix of two- and three-bedroom floor plans, Quantum said. On-site amenities include subterranean parking, and a combination fitness center and recreation room. Although not operated as traditional student housing, its proximity to USC has made it an attractive option for university students. The 129,902 square foot property was 99 percent occupied at the time of the financing, which closed in mid February.

Park City, which has owned the property since developing it in 1991, was seeking to refinance maturing debt with a 22-year fixed rate loan before interest rates increased, according to Wong, who arranged the financing. It replaces the previous loan from Fannie Mae, which had $12 million remaining.

“The historically high turnover rate from the student tenants, for what was viewed by many lenders as a typical multifamily project, was a major challenge,” Wong said in a press release. “However, by demonstrating the operational history as student housing and the long-term track record of high occupancy, we were able to secure an insurance company loan with a 22-year term at a fixed rate of 3.77 percent. In addition, we were able to secure a 60-day upfront rate lock on application, which protected the sponsor from rising interest rates that increased close to 40 basis points from application.” 

Wong told Commercial Observer, “the loan is definitely appealing looking at where current rates are at. With their spread calculated at today’s treasury rates, the current rate would be at 4.27 percent. They save 50 bps by rate- locking upfront, which is worth several million dollars over the course of their loan.”

Principal Financial did not respond to interview requests.

 

Source: commercial

Hunt Mortgage Lends $187M on Affordable and Student Housing Portfolio

Hunt Mortgage Group has provided $187 million in financing to Atlantic Housing Foundation (AHF) for a portfolio of affordable and student housing properties in Texas, Florida, and South Carolina, Commercial Observer has learned.

The package includes $102 million in variable-rate taxable financing from Freddie Mac, $83 million in fixed-rate financing through Fannie Mae’s tax-exempt bond execution—which uses a mortgage-backed security as collateral for a tax exempt bond issuance—and $2 million through a variable-rate execution from Hunt Mortgage. This was the first time the execution was used to finance student housing, according to the lender.  Hunt Mortgage also provided additional project financing for the remaining property.

The portfolio comprises more than 3,500 units of affordable and student housing across 16 properties.

Dallas, Texas-based AHF promotes and preserves affordable housing for low- and moderate-income families, and currently owns and operates 7,600 apartment units in 30 apartment communities. The non-profit organization intends to reinvest over $14 million of this financing’s proceeds back into the properties in order to make green and other improvements.   

“AHF is a seasoned multifamily group that has owned and developed affordable and student housing properties since 1999,” Paul Weissman, a senior managing director at Hunt Mortgage Group, said in prepared remarks.  “In addition to providing high-quality affordable housing to low and moderate income families, AHF has awarded nearly $5 million in collegiate scholarships to working families since 2006 and provided 15,000 hours of social service programming in 2017 alone. Our organizations’ mission alignment makes Hunt Mortgage Group and AHF a perfect partnership.”

Michael Nguyen AHF’s president and CEO commented:  “It was a pleasure working with Paul and his team at Hunt Mortgage Group.  Their intimate knowledge of the Fannie Mae and Freddie Mac processes helped pave the way for a successful, albeit very complicated transaction.  Their experience and capabilities showed as they work to anticipate issues and helped closed the financing under a very tight timeline.”

Source: commercial

Berkadia’s Hilary Provinse on Her New Role, the Health of the Multifamily Sector

Industry veteran Hilary Provinse joined Berkadia in November 2017 after 15 years at Fannie Mae, where she led the multifamily lending activities of offices throughout the U.S. In her new role, Provinse is focused on originations, overseeing 130 mortgage bankers across 31 offices. She sat down with Commercial Observer in December 2017— a few weeks into her new role—to describe her career path, the health of the multifamily sector and Berkadia’s focus on increasing diversity in the industry.

Commercial Observer: Where did you grow up?

Hilary Provinse: I grew up in D.C. and I’m a fifth generation Washingtonian. My father was actually in commercial real estate—he managed private equity funds. So, even when I was really young I would go and look at properties with him.

 So, real estate was always discussed around the dinner table?

 Yes, and I think I took it for granted. As a typical kid I’d say, “I do not want to go and work for my father. I am going to go and chart my own course.” So after college I moved to New York and worked in investment banking for a number of years but not in real estate. I was at Bear Sterns for four years then got my MBA and went to Goldman Sachs as a bond trader. I loved it, but at heart I’m a smaller-town girl, and so at the beginning of 2001, I decided to quit and move back to Washington. Goldman asked me to stay three days a week and that way I could go back to D.C. every weekend. I thought that sounded pretty great, so I accepted. It was nice for a while, and then 9/11 happened. I was actually in D.C. that day, but I decided once and for all that I really didn’t want to go back and forth to New York anymore. I quit Goldman, and they understood—everyone was making life-changing decisions after 9/11.

 I was trying to get a job in D.C. as a bond trader, which is tough. There aren’t a lot of fixed-income places in Washington; Fannie Mae and Freddie Mac were the main ones. When I joined Fannie, it was on the fixed -income side, and that’s when I learned that Fannie Mae even had a commercial real estate division; I had just assumed that it was a single-family business. I joined the commercial real estate side of the business in 2003 and was there until [I joined Berkadia].

 So you were there through the global financial crisis and Fannie Mae’s conservatorship: How was that experience?

 It was kind of all I knew. The accounting scandal [in 2006] happened right after I got there, and then one thing after the other happened. The financial crisis I’ll never forget. I had my first baby in 2008, and that’s when Lehman Brothers was failing, and all my friends at Bear Stearns were in tears carrying their boxes out of the office. It was terrible. I was a nursing mother at home watching CNBC and it was like watching a soap opera at the time. So for me, Fannie was a good, safe place to be despite the crisis because people still needed homes. Even though we went into conservatorship, it wasn’t like Bear Stearns where they were shutting the doors—I still had a job. If anything, its importance was greater because Fannie was needed more than ever to stabilize the housing markets. It was also good for me personally because one thing that’s great about the agencies versus Wall Street is they have a natural bias toward diversity and were super supportive of me as a new mother to two babies within 18 months. My job opportunities just kept getting bigger, and I think I was very lucky to be there.

 How did the Berkadia opportunity come about?

 In 2018 I would have been with Fannie Mae for 15 years, so I started feeling ready for a change and a new challenge. I wasn’t unhappy, but I’d done everything I wanted to do there. The nice thing about my job was that I had a platform to be able to see all the other lenders in the multifamily market from my seat. I was always impressed by Berkadia’s management team, and coming from a regulated entity like Fannie Mae, I didn’t want to go work for a bank because I felt it would be too similar. Berkadia is privately owned, and it has great ownership [Leucadia and Berkshire Hathaway] that is not just interested in the next quarter or six months from now: They’re interested in five years, 10 years from now. I like the long game.

 What is your role at Berkadia?

 I am the head of mortgage banking. Berkadia has two platforms: investment sales and lending and mortgage banking. So I’ll be managing the network of mortgage bankers on the lending side. We have 31 offices and 130 bankers. My job is ultimately managing them from a strategy standpoint, improving the client experience and growing our [market] share by recruiting or building new talent. We want to grow and develop junior talent, and Justin [Wheeler, the chief executive officer of Berkadia,] recognizes that our industry isn’t very diverse—so, how do we get more women and minorities interested in mortgage banking? The customer side is very diverse. Berkadia wants to focus on diversity not because we are trying to please a regulator or stockholders—it’s just good business. So, as we grow talent, that’s something I personally care about, and I just think it’s the right thing to do.

 You’ve been in the multifamily sector for a long time; how is the health of the sector right now?

 Every year I’m shocked that the health of the sector is still so good. Not because the fundamentals aren’t leaning in that direction. It’s just been such a long run. There is health in the sector, but my sense is that something squirrely is going to happen. So, something geopolitically or with interest rates—who knows what will happen—to change that trajectory, and something that is not an underlying commercial real estate fundamental. The debt side of the market I don’t see much change in—we’re still seeing refi and sale activity, and I think that will continue for a while. I see more changes on the equity side because you can’t get the yields. Five years ago, Lonestar and Blackstone and Starwood and all the big private equity firms were able to get 20, 25 percent returns because multifamily was growing so much, but I can’t imagine that rents can’t keep increasing—people can’t afford it. Who the equity is is also changing. It’s more international funds today that are willing to accept lower yields because they are comparing multifamily to a bond. It’s relative value; they’re thinking, “I can put my money in bonds, but interest rates are so low that, if I can look at little bit higher yields with multifamily, which seems fairly stable, then why not?”

 Where are we in the cycle?

 I hope we’re in the seventh inning, but we’ve been saying that for four years. That was another reason that Berkadia made sense for me: I’m not worried about where we are in the cycle because what we’re building is patient and longer term.

 What’s a piece of advice you’d give to someone entering the industry today?

 The human side of our business is so important, and I think if you focus on listening to your customer, asking questions, being urgent, trying to work hard, all the basic things that improve someone’s experience then you can be successful. It’s not just about making a loan: Ask yourself what value you’re delivering to your customer.

 What’s first on your agenda at Berkadia?

 First and foremost is getting to know the people and the culture. Externally, making sure I’m adding as much value as I can from a relationship standpoint in the industry, internally getting to know all the team and building those relationships.

 What are your 2018 resolutions?

 I used to be a very good reader and just stopped reading as I was so busy. Last year, I made a resolution to read two books a month, one fiction and one nonfiction. I did it through July then dropped to one book a month. So this year I’m doubling down again.

Source: commercial

The Formidable Fannie and Freddie: Is Multifamily Lending Set for a Slowdown in 2018?

Lenders under the umbrella of the Fannie Mae Multifamily Delegated Underwriting and Servicing (DUS) program have been setting records over the last couple of years, stepping to the forefront of the lending arena and delivering substantial amounts of debt across all multifamily property types.

Freddie Mac funded 198,000 apartment homes in the third quarter and took on $43 billion in mortgage funding in November 2017 alone, according to a Freddie Mac monthly volume survey.

In the current multifamily market environment, that volume and competition could create a problem, and a slowdown may be on the way. Analysts warn of overly competitive markets, stagnant rents in gateway cities, compressed cap rates, plateaued absorption rates and an oversupply of certain assets (such as luxury condominiums), culminating and pumping the brakes on the sector in 2018. Add to the mix the demand to meet millennial taste and you have quite the conundrum cocktail.

The amount of outstanding debt guaranteed by Fannie Mae has increased each year since 2013 to $246 billion through the second quarter of 2017—or roughly 20 percent of the market share of outstanding multifamily debt, according to a second quarter debt market report from the agency. Freddie Mac Multifamily—which doesn’t rely on DUS financing and focuses more on home ownership and affordable housing—held 16 percent of the market share to complete a 36 percent piece of the total multifamily debt pie.

The Federal Housing Finance Agency (FHFA) twice adjusted the lending caps for Fannie Mae and Freddie Mac in 2016, leading Fannie Mae to set a record for deal volume at $55.3 billion—up from $42.3 billion in 2015—while supporting 724,000 units of multifamily housing—the highest volume in the history of its DUS program. Wells Fargo Multifamily Capital and Bethesda, Md.-based firm Walker & Dunlop led the lending charge with $11.7 billion and $6 billion in loans, respectively. Fannie swiftly surpassed its 2016 record in November 2017, registering $57.7 billion in new business.

Fannie also leaped headfirst into senior housing, financing a record $4 billion through the third quarter of last year to prepare and account for an aging Baby Boomer population. Freddie, on the other hand, reeled in a record $1.8 billion in profits in the third quarter of 2017, according to a financial report from Freddie Mac CEO Don Layton.

“Multifamily is still the safest asset,” said Sol Kinraich, the founder and managing principal of New York-based MLK Real Estate Capital. “We still have plenty of markets that are millennial driven, like [Austin, Texas], Seattle, Pittsburgh and [Nashville, Tenn.] It’s definitely a trend we look for in evaluating multifamily opportunities.

“You still see the concentrated ownership of homes or that participation rates are at all-time lows because millennials aren’t committed to home ownership,” Kinraich added. “Some of our clients have been interesting in that they’re tailored in certain submarkets exclusively to millennials.”

In two 2017 Gallup surveys, 21 percent of millennials said they’ve changed jobs (even relocating and moving to other gateway cities) within the past year, and another survey of 15,000 adults released in February 2017 shows that 43 percent of employed Americans spend at least some time working remotely. These factors—migration and the desires of people to work from the comfort of home—have boosted lending interest in the multifamily sector.

“At the beginning of the cycle, lenders like Greystone and Arbor Realty Trust and others recognized the need for multifamily bridge product in order to prepare a borrower or property for agency financing,” said Joseph Cafiero, the president of New York-based firm CREMAC Asset Management. “You can see that [Net Operating Income] growth is in negative territory in some cases and growth in NOI is diminishing in others—through the tapping out on dollars per square foot or because expenses are exceeding the growth of NOI.”

That may ring true as lenders aren’t overly optimistic at the start of the New Year. In Fannie Mae’s Mortgage Lender Sentiment Survey for 2018, released on Dec. 26. 2017, lenders generally provided negative outlooks for profit margins in the multifamily category over the next three months.

“The bubble has formed, it’s just a question of when it pops,” Cafiero said. “The multifamily sector has long been recognized as the most stable or least volatile sector to invest in. The transaction volume in the sector, availability of cheap debt and extremely low cap rates fueled the bubble. Stagnant NOI growth, especially in the rent-regulated area will eventually lead to significant losses for those properties that experience compression in net cash flow. This will also lead to landlords reducing services they provide to multifamily properties, and then it will be more difficult to keep up properties like they should, which will erode the value of the property.”

Lenders cited competition, consumer demand, staffing challenges and market trend changes as the primary reasons for their negativity, according to the Fannie Mae survey. Additionally, the share of lenders who expect to see growth in refinance mortgage demand over the next three months fell to the lowest reading in a year across all loan types.

“Key trends have persisted throughout this year,” Doug Duncan, a senior vice president and chief economist at Fannie Mae, said in the report. “Lenders who see declining profits outweighed those, noting improvements in the bottom line for the fifth consecutive quarter. Three-fourths of those seeing deteriorating profits cite competition as the most important reason—a survey high—compared with only about one-third two years ago.”

Most of the competition for Class-A properties is in urban areas where there has been sufficient growth, immigration and infrastructure investment and lower cap rates, according to a third quarter 2017 multifamily investment analysis from JLL. Urban centers have seen an uptick in construction, which has essentially worked to soften some gateway markets as landlords have been forced to lower rents to meet demand.

“Multifamily has historically been a safe haven [developers and investors] migrate to with a thesis supported by the national need for housing,” Cafiero said. “Multifamily has always been the least volatile sector in commercial real estate because it’s not subject to the same market and economic influences whereas the office market is subject to a business cycle and retail is subject to factors such as consumer spending. Hotels are subject to business and travel while the office market sometimes influences hotels because if business flourishes, more people travel.”

National apartment vacancies ticked up to a seasonally adjusted 4.5 percent in the third quarter, breaking out of the 4.1 percent to 4.4 percent range that’s held steady over the last 18 quarters as the absorption rate fell to a five-year low, according to data from REIS. Still, apartments topped the list of occupancy gains across all property types at 94.1 percent in the second quarter, according to a report from National Center for Real Estate Investment Fiduciaries (NCREIF) Director of Research Sara Rutledge.

Cap rates for apartments ticked up slightly to 4.35 percent in the second quarter of 2017 but were still near historic lows. NOI growth remained stagnant at 5 percent, representing a slowdown in growth from a double-digit figure two years ago, according to Rutledge.
“What’s most interesting is the impact of this NOI compression,” Cafiero said. “The point is it’s beginning to look as if the return no longer makes sense for an investor. If you buy multifamily today at a 3 percent cap rate, you’re getting 3 percent return. At some point, you have to charge less management fees and cut costs to maintain a return.”

Apartment pricing is now just 3.4 percent higher than a year ago, which marks a new low for the current cycle, according to a Ten-X Commercial Real Estate Volume & Pricing Trends report from this past December.

With an oversaturated market in terms of assets and players, banks have been steadily tightening their standards for commercial real estate loans backed by multifamily properties, according to data from the Federal Reserve’s October 2017 Senior Loan Officer Opinion Survey on Bank Lending Practices.

But that doesn’t mean there aren’t opportunities. Deal volume has been down in many markets across the country, but the opportunities are available. Investors are looking for where there’s sufficient enough job growth, wrote Karlin Conklin, an executive vice president of Private Equity of Investor’s Management Group and a principal of IMG Northwest, in a September 2017 report for Multi-Housing News.

“It has been a resounding investment and there’s still a tremendous amount of capital available,” Kinraich said. “The retail sector has been under significant turmoil and a lot of retail transactions have been frozen as people are hesitating to deploy capital. We have clients who have sold their retail portfolio and are looking to deploy capital into multifamily. So, that’s one particular reason we’re bullish.”

Apartment lending, in particular, accounted for a hefty share of total deal volume, claiming just over 36 percent and showcasing its popularity among investors, according to the Ten-X third-quarter report.

An upside to a softening market: Some analysts expect older, renovated Class-B multifamily properties built in the 1970s to 1990s and situated in suburban areas to attract demand. Others, like Conklin, aren’t so sure the market will be able to meet suburban demand.

“From a risk and reward perspective, acquiring 1980s and 1990s Class-A properties that can hold up if we get a pullback is very attractive,” Kinraich said. “I think from a top-line-growth-revenue perspective, owners and operators have somewhat lost their purchasing power because there are a lot of concessions in gateway markets where there’s been an added supply of multifamily product and landlords have lost power.”

Kinraich added, “A lot of our clients in certain gateway markets just can’t buy product because of the pricing, and so they’re going to secondary and tertiary markets where they’ve played in the past. People are trying to make things work by exploring other markets.”

The FHFA lowered Fannie and Freddie’s lending cap for 2018—$35 billion for each enterprise, down from $36.5 billion in 2017—under the assumption that the originations market will be smaller than in 2017.

While the multifamily sector is still brimming with opportunities, analysts suggest patience, astute underwriting and cautious optimism as we venture into 2018.


Source: commercial

TF Cornerstone Lands $144M Wells Fargo Refi for 45 Wall Street

Wells Fargo has provided TF Cornerstone with a $144 million Freddie Mac financing package to refinance the developer’s residential skyscraper at 45 Wall Street, according to property records filed today with New York City Department of Finance.

The loan, which closed on Dec. 15, replaces a $134 million Fannie Mae loan that was assigned to J.P. Morgan Chase on Nov. 30. Wells Fargo’s $144 million Freddie Mac refinance paid that loan off, and the bank provided an additional $9.8 million in proceeds, records show.

buildingphoto 55 TF Cornerstone Lands $144M Wells Fargo Refi for 45 Wall Street
Entrance to 45 Wall Street. Courtesy: CoStar Group.

J.P Morgan provided a modification in the form of a first mortgage in order to give the borrower time to refinance its maturing Fannie Mae debt—which was then assigned to Wells Fargo two weeks later.

The 27-story, 493,187-square-foot residential high-rise building—located between William and Broad Streets in the Financial District—was built in 1958 and is comprised of 435 residential and five commercial units, according to PropertyShark. Eight of the residential units are vacant, according to TF Cornerstone’s website. Monthly rents at the property run from $2,845 for studios to $6,849 for three-bedrooms.

The building’s use was converted from office to residential in 1996, and is the former headquarters of Atlantic Insurance Company, according to CoStar Group. Chase Bank and Tourbillon are the building’s largest commercial tenants, occupying 8,341 square feet and 2,952 square feet, respectively.

Representatives for Wells Fargo and for TF Cornerstone did not provide comment before publication. 


Source: commercial

Greystone Lends $37M on Tacoma Apartment Complex Refi

Greystone has provided a $37 million loan under Fannie Mae’s Delegated Underwriting and Servicing (DUS) platform to refinance The Henry, a mixed-use apartment complex located at 1933 Dock Street, in Tacoma, Wash., Commercial Observer can first report.

The loan refinances a previous Greystone Fannie Mae DUS 7-year, adjustable rate mortgage made on the property last year. The deal allowed the borrower—developer The Henry Group—to receive its Green Globes for New Construction certification from Fannie Mae and thus obtain long-term, fixed-rate financing for the property. Greystone Managing Director Tom Meunier of the firm’s Newport Beach, Calif. office originated the deal.

“As a newly-constructed property, once The Henry received its green certification, it qualified for new loan incentives from Fannie Mae – including lower, long-term fixed rates which provided greater loan proceeds,” Meunier said in prepared remarks. “In addition, the building’s energy efficient systems are a direct benefit for the tenants.”

The Henry is a 161-unit, Class A mid-rise multifamily complex situated next to the Tacoma Foss Waterway. The complex includes ground floor commercial space, a resident pub and lounge, a rooftop deck, a fitness center, a picnic area and courtyard and a dog park. Rents run from around $1,670 for studio and one bedroom, one bathroom units to $2,450 for two bedroom, two bathroom units.

Greystone is listed as one of Fannie Mae’s DUS lenders, and is a leading lender in Freddie Macs small balance loan (SBL) program, having provided around $1 billion in small balance loan offerings in the last year, according to information from Greystone’s website. The firm was also the first to make a loan under the SBL program shortly after it’s inception in late 2014


Source: commercial

Maxx Properties Nabs $41M Acquisition Loan for Arizona Multifamily Property

KeyBank Real Estate Capital has secured a $41.3 million Fannie Mae first mortgage loan for Maxx Properties’ acquisition of The Station on Central apartments in Phoenix, Ariz., Commercial Observer can first report.

Tom Peloquin, a vice president in KeyBank’s commercial mortgage group, arranged the loan, which has a 10-year term, five-year interest only period and 30-year amortization schedule.

Harrison, N.Y.-based Maxx acquired The Station on Central last month. According to a release, the company applied proceeds from its sale of a portfolio of six apartment communities located in Omaha, Neb. to the purchase.

The Station on Central is a 414-unit gated community that was built in 2000 and renovated in 2015. Its amenities include two swimming pools, a spa, a fitness center, a clubhouse and picnic areas. The development also includes a 508-space parking garage.

“We are pleased to have acquired an outstanding apartment community in a highly attractive submarket of Phoenix,” Ed Lange, the chief executive officer of Maxx Properties, said in an announcement regarding the acquisition earlier this month. “The community represents an attractive value-add, renovation opportunity. We are pleased to capture this opportunity to expand our operations and efficiencies in Phoenix, and expect The Stations on Central to generate attractive investment returns.”

Maxx Properties’ portfolio includes 82 properties comprising 9,446 owned units and 13,000 managed units in six states.

Officials at Maxx Properties declined to comment on the acquisition financing.


Source: commercial

RW Selby Inks $116M Loan for Eco Improvements at LA Apartment Complex

Los Angeles-based RW Selby has signed a $116 million loan for eco-friendly renovations at its Heights Apartments in L.A., according to an announcement by Walker & Dunlop, which arranged the financing for the deal.

Fannie Mae will provide the loan through its Green Rewards program, which offers higher available balances and more generous interest rates to borrowers who improve energy and water efficiency at their properties.

Representatives for RW Selby were not immediately available to describe the renovations planned for the property at 7077 Alvern Street. On its website, Fannie Mae wrote that qualifying improvements might include “installing water-saving irrigation systems, improving insulation [and] making other energy- and water-saving improvements.”

The approximately 10-acre development includes 582 one- and two-bedroom garden apartments. On its website, RW Selby touts the property’s site, along Interstate 405 just northwest of Inglewood, as being “just minutes from beaches, restaurants, entertainment, freeways and shopping.” It also features two “resort style” pools and spas among other amenities, along with the complex’s verdant landscaping.

California property managers’ role in water conservation was hotly debated during the state’s six-year drought that ended in April. An order issued by Gov. Jerry Brown in 2015 prohibited developers from irrigating new projects with large amounts of potable water.

“The idea of your nice little green grass getting lots of water every day, that’s going to be a thing of the past,” the governor said at the time.

Walker & Dunlop officials explained that the loan’s execution was expedited at RW Selby’s request.

“When I received a 5:30 a.m. call requesting to rate lock the Heights before 11:00 a.m., I knew…that we had little room for error,” Trevor Fase, a Walker & Dunlop managing director, said in a statement. “The team’s diligent and proactive work…allowed us to complete the application to rate lock [the] process in record time.”

A representative from Fannie Mae was not available to comment.


Source: commercial

Lenders Make the Case for Going Green


Source: commercial