PHILADELPHIA–Beech Street Capital has arranged the $68 million refinance of a four-property apartment portfolio owned by the Galman Group, providing conventional Fannie Mae loans. The properties have 1,106 units in total, and they are located in Philadelphia and Conshohocken in Pennsylvania, and Newark and New Castle in Delaware.
According to Beech Street’s vice-president in Boston, Brian Sykes, the Galman Group approached the mortgage banking company looking to lock in historically-low interest rates on the properties, each of which had a mortgage that would be maturing this year. Each mortgage loan had a different expiration date, however, determining when refinance could be accomplished without penalty.
Beech Street worked closely with Fannie Mae to secure new loans under its forward rate lock program, says Sykes, who originated the transaction. The forward-lock was devised to permit borrowers to obtain lower current interest rates on mortgages with reduced prepayment penalties.
“The Beech Street team exceeded our expectations with their expertise and resourcefulness,” says Sam Goldstein, chief financial officer at Galman in a statement. The bank was able to arrange an "all-in cost" refinance, Goldstein said, meaning the overall cost of the refinance at lower rates was about the same as under a standard closing.
The ten-year, fixed-rate loans have a 9.5-year yield maintenance. “This transaction illustrates how well the Fannie Mae forward rate lock program can work and confirms that it can be an effective tool to allow borrowers to lock in low rates while at the same time being able to reduce or eliminate prepayment penalties,” Goldstein notes.
The four properties include the 101-unit North Lane complex in Conshohocken, 93-unit Sedgwick in Philadelphia, 278-unit Buckingham Place in Newark, Delaware, and 634-unit Castlebrook in New Castle, Delaware.
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