David Lacki of Capri's Walnut Creek office was the originator of each Fannie Mae MBS/DUS second mortgage. "I see this as a good deal for partnership as it allowed them to use the funds they receive though the second to purchase other properties in the bay area," Lacki tells GlobeSt. "Each one is a fixed 18-year loan in the low 8% range and so they can easily take the proceeds and purchase other properties in the area and increase their overall yield which really makes good business sense."
Lacki adds that "all three loans are Fannie Mae loans, which are unique in that Fannie Mae allows borrowers after a period to add a supplemental or second, which when you look at it as a straight second actually offers a lower rate than the first which ultimately offers them instant equity to go ahead and buy other properties."
The financed apartment projects include:
--Coronado Pool is 948-unit market rate garden apartment complex located at 200-355 Park Plaza; 101-405 Palmcrest; 2-335 Coronado; and 355 Southgate. The property was constructed between 1957 and 1969 and the unit mix is comprised of 138 studio, 658 one-bedroom, 143 two-bedroom and 9 three-bedroom apartments. The property was funded with an 18-year, 8.23% fixed rate loan of $30.12 million with a 25-year amortization.
--Built between 1951 and 1953, Garden West is a 598-unit rental property consisting of 82 studio, 210 one-bedroom and 306 two-bedroom apartments. The complex is located at 220-380 Lake Merced; 190-250 Southgate; 18-189 Crestwood; 100-252 Bel Mar; and 4-499 South Mayfair. The 18-year, $20.56-million loan was funded at an 8.749% fixed interest rate with 25-year amortization.
--Garden East is a 388-unit multifamily complex located at 10-90 Forest Glen, 80 Fairway, 8-195 Park Plaza, 3-98 Bel Mar and 201-299 South Mayfair. Garden East was constructed between 1951 and 1953 and the property offers 91 studio, 71 one-bedroom and 226 two-bedroom apartments. The fixed interest rate for the $13.06-million loan was 8.61% for a term of 18-years with 25-year amortization.
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