(Read more on the debt and equity markets and the multifamily market.)
WASHINGTON, DC-Condo reversions, once rare endeavors in the DC market as little as one year ago, are now downright commonplace. Fortunately, financing to revert condo buildings back to multifamily assets is still available, especially for close-in DC assets, according to one broker.
"There is still plenty of debt available," Ted Hermes, VP of Walker & Dunlop tells GlobeSt.com. "Yes, the rates are a little higher and there are fewer lenders out there. And the capital markets have almost shut down. But the agencies and portfolio lenders are still active." Hermes reports he is working on several condo reversions at the moment and is confident he can place the debt.
Still, though, it will be hard to beat the financing Palisades Apartments located on 4540 MacArthur Blvd., in Washington, DC, received in May to fund its reversion. Owned by Palisades LLC, the 62-unit building received a $6.5-million refinance loan that was structured as a 10-year, IO with a rate of 5.5%. Walker & Dunlop negotiated the deal with Green Park Financial, a national multifamily finance provider that loans through Fannie Mae.
Three months later, Hermes reports, Green Park Financial still has very competitive spreads, but agrees this particular deal would be difficult to replicate. "The timing was perfect for the borrower. It was able to lock rate right before the volatility started."
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
