(Read more on the debt and equity markets and the multifamily market .)
LUFKIN, TX-A development group from Houston has refinanced three complexes from its all-Texas apartment portfolio for $33 million. The collateral is 520 units in Lufkin, Beaumont and Nacogdoches.
Leyendecker Group, which built the complexes between 2000 and 2003, obtained financing to fund future development projects, says Jim Kirkpatrick, vice president with Live Oak Capital Ltd. in Houston. He arranged the 10-year, non-recourse loan through CIBC World Markets Inc. of Toronto, ON. He adds that Leyendecker Group is in the process of refinancing its other complexes.
“There was a lot of captured equity in those properties. At one point they were actually thinking of selling them,” Kirkpatrick says, “but they did an analysis and determined they could refinance their holdings, pull out the equity they needed and still maintain ownership.” Kirkpatrick tells GlobeSt.com that Leyendecker Group will begin construction on additional projects in the state n three to six months.
Kirkpatrick says placing the loan offered some challenges, given the recent turmoil in the capital markets. Although the borrower's pricing did go up, the loan remained interest-only at 6.4% for five years and 30-year amortization. The loan to value is 80%.
Kirkpatrick says the loan request attracted a great deal of interest, given Leyendecker Group's reputation for building quality multifamily. “He's a good apartment builder who builds a good product and it shows in the results,” he adds. The refinanced assets at 95% occupied.
The developer's collateral is the 138-unit Shadow Creek Apartments at 2807 Daniel McCall Dr. in Lufkin; 196-unit Eagle Landing Apartments at 3980 N. Major Dr. in Beaumont; and 186-unit University Hills Apartments at 4704 N. University Dr. in Nacogdoches. The trio has one-, two- and three-bedroom units averaging 890 sf, with the monthly rent averaging $815.
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