Funding of Nearly $100M Gets Portfolio Over the Finishing Line

PASCO, WA—The origination of a $97.85 million Fannie Mae credit facility provided permanent fixed-rate financing for the acquisition of five multifamily assets on behalf of Investors Capital Group LLC. The structured facility features five tranches of fixed-rate debt with 10- and 12-year terms, half-term interest-only, a 30-year amortization and loan-to-value constraints that allow for 75 to 80% ratios.

The rates for the five tranches range from 4.34 to 5.15% and were locked for four months. The facility allows future additions, substitutions and flexible prepayment. Managing director Jeff Stuart of Berkadia’s Seattle office handled the transaction.

“Everyone involved in this transaction did a great job of working together to get these five acquisitions across the finish line,” said Stuart. “Fannie Mae’s structured finance team and ICG’s acquisition team demonstrated exemplary teamwork to get the facility structured and closed. This is an advantageous facility for ICG’s 2018 apartment fund, which raised $61 million in equity to acquire 1,012 multifamily units across five properties.”

The five properties acquired are in four western states: Washington, Idaho, Utah and Arizona. Avenue5 Residential, a Seattle-based residential management company with a national footprint, will manage the portfolio. Avenue5 manages more than 50,000 units nationwide.

The Crossings at Chapel Hill in Pasco, WA offers spacious homes in the center of the Tri-Cities. Built in 2006, the community features one-, two- and three-bedroom units with vaulted ceilings, double-paned windows, stainless-steel appliances and walk-in closets. The property also includes a pool, a 24-hour fitness center and a year-round hot tub.

“This acquisition fits into ICG’s investment thesis of buying quality multifamily with realistic income expectations and improving operations with superior management. The average unit size was quite large at 1,172 square feet and the purchase price is considerably less than the replacement cost,” Stuart tells GlobeSt.com. “The Tri-Cities market is exhibiting strong job and population growth. Investors have a strong appetite for Tri-Cities product because properties can be purchased at yields approximately 100 bps higher than comparable Seattle MSA multifamily. Seattle trades for low 4 caps versus the Tri-Cities at mid-5 cap rates.”

Greentree Apartments is located in Glendale, AZ at 5959 W. Greenway Rd. The community is near shopping and the Peoria sports complex, and is comprised of one- and two-bedroom apartments, many of which are renovated with new cabinetry, granite countertops and stainless-steel appliances. On-site amenities include a swimming pool, a fitness center and a spa.

Juniper Meadows is located in Phoenix at 16804 N. 42nd Ave. The community has access to the area’s shopping, schools and parks, and is comprised of two-bedroom two-bath apartment homes with 9-foot ceilings. Many of the homes are renovated with new cabinetry, granite countertops and stainless-steel appliances.

Eagles Landing Apartments is located at 2785 Eagle Dr. in Ammon, ID. The community offers close proximity to shopping, outdoor recreation areas and entertainment venues, and features one-, two- and three-bedroom units. On-site amenities include a pool, a hot tub, a barbecue area, a 24-hour fitness center, a billiards room, two playgrounds and a basketball court.

The Falls at Canyon Rim is located in Ogden, UT. The community is within walking distance to neighborhood shopping and entertainment, and has access to Hill Air Force Base and Weber State University and Medical Centers. The property offers well-maintained one-, two- and three-bedroom units with balconies. On-site amenities include basketball courts and covered parking.

ICG is a Seattle-based real estate investment firm with a portfolio of more than 6,000 apartment units in eight western United States. ICG has acquired in excess of $1 billion in multifamily investments since 2001.