VERONA, NJ-Investors Savings Bank has provided $23.8 million in a permanent mortgage Highlands at Hilltop, a recently opened 95-unit luxury apartment community here. The 10-year loan to co-developers Roseland Property Co. and JMP Holdings is based on a 30-year amortization, at a 5% interest rate, says Richard Spengler, Chief Lending Officer of Investors.
“This was a take-out of a construction loan by another bank,” Spengler told GlobeSt.com. The bank now is looking at funding a construction loan to the developers for a second phase of development, which is 100% rented.
The transaction, which closed two weeks ago, was Investors’ first with Roseland, though it has worked frequently with JMP. It closed quickly despite challenges in the luxury multifamily market.
“Luxury makes it a bit tougher,” Spengler says, simply because there are fewer such projects in existence.
The Verona financing is the latest transaction in the latest in Investors’ plans to increase its work in the commercial sector. The bank, which had specialized in financing one- to four-unit residential properties, began diversifying into retail and other commercial properties some five years ago, and kept doing so throughout the downturn.
“It was a good time to be healthy,” Spengler says.
Currently appealing sectors are retail and industrial, while the office market remains week as tenants take less space, he says. More recently, Investors has looked to expand geographically as well, opening an office in Manhattan to pursue transactions in New York City and beyond. And it remains involved in residential lending, a market that is picking up, he says.
“Sellers and developers are working together,” Spengler says. “Loan requests have been modified. Expectations have come down, and we’re seeing some flickers of life.”
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