Former Bank Owned Multifamily Wins Lender Confidence

A former bank-owned property has seen a successful turnaround.

ORLANDO—A former bank-owned property has seen a successful turnaround. Kensington Cottages, a 169-unit modular-type multifamily property in Orlando, has won the confidence of lenders. A private company purchased the multifamily asset in 2014 when it was 57% occupied and renting for below market rate. Since then, the company invested about $1.8 million into renovations and upgrades including: exterior building improvements, landscape rehab, new fencing, painting, new equipment, electrical, plumbing, HVAC, roof replacement, appliance replacement, flooring, grounds improvements, and parking lot repairs. “The seller also re-leased the project bringing it more in-line with market levels and the property stabilized in July 2015,” Chad Musgrove , vice president at Hunt Mortgage Group , tells GlobeSt.com. “The new owner is a seasoned local commercial real estate and multifamily investor who has closed more than 3,000 real estate transactions totaling over $500 million.” A private company acquired the multifamily property and secured a $6 million Freddie Mac Small Balance Loan to finance the acquisition of a multifamily property located in Orlando, Florida. Hunt arranged the seven-year fixed-rate loan with a 30-year amortization. Built in 1984 and located at 2917 Burroughs Drive, the multifamily property has 21, single-story, garden-style residential buildings. The property also has a common laundry room onsite. “Kensington Cottages is in good condition following the recent rehab and the borrower plans to complete additional repairs and upgrades to the property,” says Musgrove. Kensington Cottages offers studio, one-bedroom, two-bedroom and three-bedroom units. Most of the multifamily community’s tenants do not qualify for traditional housing assistance but pay low to very low income rents relative to the area median income. With this in mind, Freddie Mac approved an exception request for a loan amount above the $5 million maximum loan threshold for the Freddie Mac Small Balance Program as a part of its mission to provide affordable housing. One of the last fractured condos in Orlando recently sold. Check out my latest column . Central Florida CRE remains strong with Multifamily, Retail and Industrial leading the way. Are You In The Know? How can you profit? Join us at RealShare Central Florida on September 7th for impactful information from the leaders in Central Florida CRE.Learn more.