NEWPORT BEACH, CA-The local office of Beech Street Capital LLC has arranged $12.54-million in financing for two multifamily buildings in Southern California. The Bethesda, MD-based mortgage finance provider obtained the financing from Fannie Mae.

One surprising part of the deal was the speed of origination, which took only 30 days. “While that’s not an unusual amount of time for Fannie Mae to process a loan for a repeat customer, in this case the client was a first-time borrower who had two properties, each with its own mortgage,” says Kristen Croxton, the Beech Street senior vice president of originations partner, who originated the loan with fellow Beech Street SVP Greg Reed.

Although the borrower, Marsha Hester, general partner of Retirement Security, had no previous track record with Fannie Mae, Croxton and Reed say they were able to convince the federally chartered lender that the borrower was a safe bet. The firm developed the two apartment buildings in the early 1960s and has owned and operated them ever since.

Beech Street was able to provide debt while maintaining the current ownership structure.  Allowing the multi-asset ownership entity to remain intact was important to the borrower, according to Croxton, because a nominal change in ownership and the transfer of assets to a new owner would have triggered tax consequences.

Both the 88-unit Normandy Park Apartments and the 65-unit Casa La Habra Apartments have occupancy rates higher than 95%, according to Beech Street. The fixed-rate Fannie Mae conventional loans each have 10-year terms with 9.5 years yield maintenance and a 30-year amortization schedules.