TAMPA, FL-Behringer Harvard obtained a Freddie Mac loan for $19.7 million, secured by a first mortgage lien on the Palms of Monterrey, a stabilized 408-unit multifamily complex in Ft. Myers. The debt financing has a seven-year term and Holliday Fenoglio Fowler LP brokered the deal. The loan bears interest , at a variable annual rate equal to one month  LIBOR plus 3.35%, with the rate guaranteed to never exceed 7%.

Behringer Harvard, a sponsor of non-traded publicly-registered REITs based in Dallas, took possession of the Palms of Monterrey in May by foreclosing on the senior debt, which it had purchased last October. The property, which is about 100 miles south of Tampa, was a failed condominium conversion.

The Behringer Harvard Opportunity REIT II, the official owner of the Palms of Monterrey, purchased, through a joint venture with a separate partnership, Tampa-based DeBartolo Development and Tyler Christian Properties, a promissory note secured by the first lien mortgage on the property for $25.4 million, plus closing costs, from the FDIC, which acted as a receiver for Chicago-based Corus Bank, N.A. The original Corus loan was for $69 million. The lender was taken over by the FDIC last September.

“It is appropriate to put debt on the Palms of Monterrey,” says Jason Mattox, chief administrative officer for Behringer Harvard, “because adding leverage can often-times lead to higher returns.” If there is a lower interest rate on the debt compared to what the property yields in rent payments, that increases the yield on the equity portion of the property, he says.

Freeing up equity allows the Behringer Harvard  Opportunity REIT II to invest in other properties, says Mattox. “The acquisition environment is improving as more sellers are willing to sell now,” he says. “Also, it appears that the debt freeze is beginning to thaw and that transaction volume is increasing.”

While Mattox was mum on what deals the Behringer Harvard Opportunity REIT II is working on, he says “There is plenty of opportunity in Florida,” as well as other coastal markets.