The loan arranger, Stuart Wernick, president of Dallas-based Quantum First Capital, says the capital change-out retired a higher rate mezzanine loan and replaced it with a five-year facility at a floating rate interest with strong appeal for a prospective buyer. "Any new buyer would find this attractive as an assumption," he tells GlobeSt.com about the revised financing between Green Park Financial LP of Bethesda, MD and Olympus affiliate, WMC Management, successor to Walden Residential Inc.
Based on a deal of this magnitude, market sources say the loan reflects an interest rate on the variable side slightly north of 2.5%.
Eight months ago, the borrower inked a $479.2-million, Fannie Mae master credit facility with an expansion option. Wernick says the option was exercised well in advance of the expiration, boosting the bottom line to $496.9 million to take advantage of low market rates. Walden channels acquisitions and dispositions through the facility, which enables a juxtaposition of assets with no pre-payable penalty.
The Olympus affiliate borrower used 52 multifamily properties in six states as collateral. The remaining 17 properties on the market had debt with other lenders that was assumed years ago and couldn't be included in the new facility, according to Wernick. For previous story, click here.
Walden went private in February 2000 with a $630-million, five-year loan from Green Park. By moving in advance of that expiration, Wernick says "they were able to take advantage of lower rates and re-price their loan." And with Green Park in the lender's seat for the last four years, the deal wasn't overly shopped. "It was a proactive measure for both lender and borrower to facilitate a structure that made the best sense," he says.
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