The loans are all for 10 years at fixed rates of 5.3% to 5.4%, with some of them interest-only for the first five years. Warren describes the loans as a variety of structures. Since some of the properties were highly leveraged and some were at very low leverage, Centerline structured the 12 loans to balance the leverage across the portfolio to an average of about 70%.

The originator on the deal was David Burt, a regional director in the Small Business Loan Group at Centerline. Chief underwriter was Triloki Kaushal, based in New York City; referring broker was Todd Sherman of First Pacific Financial in Los Angeles.

The apartment buildings were constructed in the 1980s and the 1990s, and the portfolio is both well leased, at about 97%, and well-maintained, Warren said. He noted that property condition is one of the factors that lenders look at more closely these days, along with sponsorship.

“Credit in general has evolved over the past few years in that sponsors are more important than they once were,” Warren explained. “Even though real estate loans are usually non-recourse, underwriters want to see the strength of the portfolio and the experience of the borrower. In the Fannie Mae world, the property condition has become much more of a concern than it was before.”

The borrower in this case was a Los Angeles-based private investment group with significant holdings in the multifamily sector. “This was a bread-and-butter transaction,” Warren said. “These are good properties in good shape that have been well-maintained and operated efficiently.”