AUSTIN-The local office of Berkadia Commercial Mortgage LLC has closed four loans totaling $37 million on four multifamily properties in Texas. Berkadia and the borrowers closed the loans with help from CMBS and Freddie Mac financing.
Berkadia vice president Andy Hill worked with JAW Equity Management to originate $8.1 million and $7 million in refinancing for the Lodge Apartments and Waterfall Park, both of which are in Houston. C-III Commercial Mortgage funded the 10-year, fixed-rate CMBS loans, which had a mid-4% interest rate. The 593-unit Lodge Apartments are at 7825 Corporate Dr., while the nearby 635-unit Waterfall Park is at 7502 Corporate Dr.
Hill tells GlobeSt.com that the refis on these properties were used to retire a bridge loan placed on the assets in 2008. He acknowledges that obtaining the financing was actually easier in 2008, mainly because of the location. "Other properties in the area haven't done that well," he says. However, both assets were high-performing, with a stable history and a good operator. As such, the borrower did receive multiple quotes from lenders. Hill says it was decided to go CMBS because of the long-term hold. "Furthermore, agencies weren't the right execution for these, given the locations," Hill explains.
The situation was different, however, with the other two loans. With those, Berkadia operated on behalf of Allen Harrison Co. to arrange $21.8 million in total financing from Freddie Mac for the acquisition of the 835-unit Creekstone Apartments (formerly the Palms at Walnut Creek) in Austin, and the 811-unit Preserve at Cypress Creek (formerly Blenheim Apartments) in Houston.
The loan on Creekstone Apartments at 8054 Exchange Dr. carries a floating rate, featuring a sub-3% interest rate and closed approximately 45 days from its application. Meanwhile, Preserve at Cypress Creek at 1007 Cypress Station Dr, merited a 10-year, fixed-rate $6.4 million loan featuring a 4.09% interest rate.
"We had eight-plus quotes on each of those loans," Hill says, adding that the CMBS folks can compete with the agencies on good rates. "In this case, the agency was right there with them," he went on to say. "There is also the ability to do the supplemental loan down the road."
Interestingly enough, the borrowing situation has changed from even a couple of years ago, during which agency funding was the primary way in which a borrower could find money to buy or refinance a property. These days, however, more lenders are crowding into the marketplace, giving the borrower more choice. "Our job is to go out and clear the market, and to turn over every rock and find the right execution," Hill says. "That's what we did."
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