According to Arbor regional director Anthony Licwinko, who originated the transaction, the portfolio was bifurcated for the purpose of the loan. Four of the properties were financed in tax-credit bond deals totaling $61.3 million.
Licwinko, who worked with Arbor chief underwriter Justin Kennedy in negotiating the deal, tells GlobeSt.com the borrower took an adjustable rate loan that floats over the BMA (bond) index. "It was a very highly negotiated deal with many waivers involved from Fannie Mae," he notes.
The other three properties received $27.4 million in conventional financing through Fannie Mae's DMBS pool. While that program is usually reserved for transactions in excess of $50 million, Licwinko tells GlobeSt.com that "since the overall volume was high enough, Fannie Mae gave us a waiver." He noted that the loan was secured at "a very attractive spread, in the neighborhood of one point over the 90-day LIBOR.
The portfolio comprises 2,068 garden-style apartments in two- and three-story walk-up properties. The seven communities were constructed between 1968 and 1989. Five of the properties are located in Missouri: two in St. Louis and one each St. Charles, Manchester and Creve Coure. The others are in Fairview Heights, IL, and Wichita, KS. All are managed by the controlling partners.
According to Licwinko, under the terms of the loan, the borrower plans to take advantage of an option to finance additional assets through the DMBS pool during the first 90 days. "It looks like we're going to add some properties," he tells GlobeSt.com. Licwinko adds that one such property would be another refi while others would be new acquisitions located in the Mid-Atlantic region. Up to four more properties will be added to the pool, he states.
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