(Mark Your Calendars: RealShare REAL ESTATE 2012, March 22nd in Los Angeles).
SAN FRANCISCO-Bethesda, MD-based mortgage banking company Beech Street Capital LLC is providing $53 million in Fannie Mae loans to refinance two Northern California multifamily portfolios consisting of six properties totaling 540 units. The transactions were originated by Beech Street’s senior vice president’s Greg Reed and Kristen Croxton.
The first portfolio consists of four properties in the East Bay submarkets of the San Francisco MSA: two in Concord, one in Livermore and one in Fremont. The properties are well-maintained, according to Beech Street, and located in submarkets with strong fundamentals for multifamily housing. Beech Street delivered an average interest rate across the portfolio in the low 4% range, with three loans below 4%.
According to Beech Street, the borrower, only identified as a Northern California investor who has purchased and renovated more than 3,000 apartment units and 23 communities in the last 10 years, was primarily striving to secure long-term debt at today’s low-interest rates and needed to rate lock prior to delivering a mandatory 30-day payoff notice to the existing lender for one of the two properties in Concord. This required Beech Street to take the loan from application to rate lock in a very short period of time.
The property in Fremont was held on the borrower’s line of credit, and again the borrower wished to lock in a low interest rate, but at the same time delay closing until month-end to take advantage of the extremely low interest rate on its line of credit. The other two properties in the portfolio did not have any existing debt. GlobeSt.com was unable to reach Beech Street before deadline to find out more information about the borrower.
Beech Street accommodated the borrower’s requirements while locking in a low rate for all four properties. In addition, the company structured the transactions to allow for several transfers of ownership interest for estate-planning purposes. The fixed-rate loans have a 10-year term with 9.5 years yield maintenance and amortization of 30 years payable on an actual/360 basis.
The borrower also asked to refinance a second portfolio consisting of two properties, one in Santa Clara and one in Gilroy—both in exceptional condition, according to the company. The borrower held these two assets on its line of credit, and the new fixed-rate loans on the second portfolio have a 10-year term with 9.5 years yield maintenance and amortization of 30 years payable on an actual/360 basis with a fixed-rate below 4%.
“Although the structure of these loans was straightforward, the challenging aspects were the coordination and timing at year end,” the borrower says in a prepared statement. “Beech Street delivered both.”
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Carrie Rossenfeld
Carrie Rossenfeld is a reporter for the San Diego and Orange County markets on GlobeSt.com and a contributor to Real Estate Forum. She was a trade-magazine and newsletter editor in New York City before moving to Southern California to become a freelance writer and editor for magazines, books and websites. Rossenfeld has written extensively on topics including commercial real estate, running a medical practice, intellectual-property licensing and giftware. She has edited books about profiting from real estate and has ghostwritten a book about starting a home-based business.
