Hunt Mortgage Group Closes $137M in Multifamily

Hunt Mortgage Group, New York, closed nearly $137 million in financing for a multifamily portfolio in Texas and other multifamily properties elsewhere in Texas and Florida.

The company’s Atlanta team closed $119 million for a 10-property multifamily portfolio with 2,416 units in Houston and Dallas. Hunt Mortgage refinanced the portfolio with loan amounts on individual properties ranging from $8.5 million to $16.8 million, all through the Freddie Mac floating rate program.

“Hunt Mortgage Group facilitated the acquisition of all of these properties for the borrower in 2013 and 2014, and the borrower has invested in significant capital improvements at each location since that time,” said John Beam, Atlanta Managing Director with Hunt Mortgage Group.

The borrower is a seasoned commercial real estate and multifamily investor, a repeat Hunt Mortgage Group client and a new Select Sponsor.

Beam said Houston and Dallas have seen expanding populations over the past few years, resulting in strong demand for quality, affordable multifamily options. “These properties are all 1980s vintage and they perfectly address the affordable unit needs in both markets,” he said. “Furthermore, the properties are managed by a sponsor-affiliated management firm that continues to serve the tenants and add value.”

Also in Texas, Hunt Mortgage Group provided an $11.6 million Fannie Mae loan to refinance a multifamily property in Humble, 20 miles north of the Houston central business district.

Villas at Foxbrick is a garden-style multifamily property consisting of 11 two- and three-story residential buildings and a single-story leasing office. The borrower is TJD Texas Enterprises LLC, a Texas limited liability company. Loan terms include a 10-year term, 30-year amortization period, and a 9.5-year yield maintenance period.

“The borrower is a new Hunt Mortgage Group and Fannie Mae customer that has owned and managed Villas at Foxbrick since it was built in 2004,” noted Daniel Eibler, director with Hunt Mortgage Group. “The property is in very good condition and benefits from solid and thoughtful operations.” He said the property has been at full occupancy for the past 24 months.

The property is on 8.6 acres and was developed in two phases. Phase I was built in 2004 and consists of 120 units in seven buildings; phase II comprises 80 units in four buildings and was built in 2006. The unit mix is one- and two-bedroom units in a variety of floor plans. Property amenities include 325 parking spaces, two saltwater pools and a spa and fitness center.

The mortgage banker on this deal was Robert Merkt of Commercial Capital Advisors.

In Florida, Hunt Mortgage Group provided a $6 million Freddie Mac Small Balance Loan to finance acquisition of a multifamily property in Orlando. The transaction is a seven-year fixed-rate loan with a 30-year amortization.

Kensington Cottages is a 169-unit modular-type Cardinal construction multifamily property at 2917 Burroughs Drive. The property consists of 21 single-story, garden-style residential buildings built in 1984. The property also has a common laundry room onsite.

Chad Musgrove, vice president of Hunt Mortgage Group, said the property serves a majority of tenants that do not qualify for traditional housing assistance but do pay low- to very-low income rents relative to the area median income. Given this, an exception request was approved by Freddie Mac 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.

Kensington Cottages was a bank-owned property that was purchased by the seller in 2014 with occupancy reported at 57 percent and below market rents. Since 2014, the former owners injected $1.8 million in 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,” Musgrove said. “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.”

Kensington Cottages offers studio, one-bedroom, two-bedroom and three-bedroom units, with a total net rentable area of 101,376 square feet. The property has 271 parking spaces including several handicap accessible.