Agencies Continue to Close Multifamily Refi Deals

While some aspects of the lending markets have paused, the agencies are continuing to lend. Refinancing deals in particular have pushed forward to close during the pandemic. Berkadia has secured more than $44 million to refinance two multifamily assets on behalf of an unnamed private investor. The loans have 10-year fixed rates through Fannie Mae Multifamily affordable housing and conventional loan programs. The two deals are an example of ongoing lender interest, even through the pandemic.

“We had a lot of lender interest in the properties, due to the borrower’s reputation, recent capex investment and strong historical operations,” Vincent Punzi, senior director in Berkadia’s Irvine office who secured the funds on behalf of the borrower, tells GlobeSt.com.

The borrower actually had term left on its current financing, but decided to move quickly in light of the low interest rates. The two loans had a blended rate of 2.49% with $17 million cash out. “Wellington Park and Vineyard Village had plenty of time to refinance but saw an opportunity for a significant cash-out, while lowering their interest rate,” says Punzi. “Those type of opportunities and refinances with loans maturing are keeping us busy. On the acquisition side, the pipeline has been slower than usual but we have seen those debt requests pick up over the past couple weeks.”

Refinancing deals, like these, have become common in recent weeks as a result of the changing market. “Currently, a majority of lender pipeline’s are refinance versus acquisition opportunities,” says Punzi. “Pricing has been the same but many lenders will have a higher credit tolerance on acquisition deals because they prefer to see fresh equity.”

For borrowers looking to secure financing, Punzi warns that the market is currently volatile and changes daily, as a result, the more time, the better. “The market is fluid and things are changing daily with debt providers. We are recommending that our clients bring us in early for guidance so we can provide real time feedback,” he says. “Furthermore, if there is interest to refinance this year, it is best to get organized now. We have a few clients that are in no rush to refinance, but are preparing in the meantime. This way, if we see an opportunity, we’re ready to move towards an application and rate lock.”