DETROIT—The Detroit and St. Louis offices of Berkadia Commercial Mortgage LLC recently closed $68 million in financing for two multifamily properties in Ann Arbor, Michigan and one in St. Louis. Berkadia and the borrowers closed the loans with help from the FHA, HUD and Fannie Mae.

In Michigan, Berkadia senior vice presidents Ernie Katai, Pete Benedetto and Colin Callaghan worked with Albert M. Berriz of McKinley, a commercial real estate investment and management firm, to secure the 35-year, fixed-rate loans through Berkadia's FHA/HUD program.

The firm first closed an $18 million loan for Meadowbrook Village Apartments, located at 1550 Brookfield Drive. The loan will refinance an existing mortgage on the property and includes a 2.9% interest rate and an 80 percent loan-to-value ratio. The property has 217 one- and two-bedroom units and is currently 100 percent occupied. Amenities include a two-acre dog park, a clubhouse business center and a butterfly garden.

They also arranged $15.2 million for Park Place Apartments. The loan has the same interest rate and loan-to-value ratio as Meadowbrook. Located at 1980 Pauline Boulevard, the property consists of 312 one- and two-bedroom units and is also 100 percent occupied. Amenities include a pool, fitness center and playground.

McKinley uses Berkadia as their preferred lender for HUD executions. These newest loans represent the 13th and 14th HUD financings that Berkadia has completed with McKinley. They have recently originated and closed over $200 million in HUD financings for McKinley communities across the Midwest and in Florida including an $18 million 223 (f) HUD financing for a 477-unit community in Michigan's Pittsfield Township and a $11.2 million 223 (f) for a 228-unit community in nearby Ypsilanti Township.

“The long-term nature of HUD debt provides our clients with the peace of mind that comes with knowing they have locked these historically low rates in for a 35-year term,” Callaghan says. “I would anticipate continued demand for HUD-insured debt for the foreseeable future, particularly with the large volume of CMBS and agency debt maturing over the next several years.”

Headquartered in Ann Arbor, home of the University of Michigan, McKinley has a big presence in other major university towns like Champaign, Illinois and Gainesville, Florida, as well as many small cities, such as Norfolk, Virginia, that also depend on large but stable employers. McKinley currently owns and manages more than 34,000 apartments and roughly 21-million-square-feet of commercial space in 25 states.

The $35.3 million loan for Gentry's Landing, a 29-story, mixed-use, multifamily property located in downtown St. Louis was handled by Senior Vice President Ron Verrilli of Berkadia's St. Louis office, which worked with the borrower, Integrity Real Estate LLC, to secure the financing.

The loan, arranged through Berkadia's Fannie Mae program, will refinance existing debt on the property. The 12-year, fixed-rate loan features a 30-year amortization schedule.

“Berkadia has a strong, long-standing relationship with Integrity Real Estate, having worked together to refinance this property twice before,” says Verrilli. “Due to the property's unique, mixed-use nature, the transaction had many moving pieces and could not have been completed without the trust and cooperation of both the borrower and Fannie Mae.”

Gentry's Landing, located at 400 North Fourth Street in St. Louis, has 412 units, as well as commercial space occupied by retail and office tenants. Apartment amenities include an observation deck, a rooftop swimming pool and two fitness centers. The property is currently 95 percent occupied.

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Brian J. Rogal

Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.

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