Commercial/Multifamily Briefs Oct. 1, 2020
Freddie Mac Multifamily Launches Sustainability Bonds
Freddie Mac Multifamily, McLean, Va. announced it will soon go to market with sustainability bonds.
The new Freddie Mac offering, dubbed K-SG, is aimed at attracting capital to support economic mobility for residents and economic growth for communities.
“The new Sustainability Bonds offering rounds out our Impact Bonds lineup, joining the Social Bonds series that launched earlier this month and the K-G series that launched in 2019,” said Robert Koontz, Head of Capital Markets for Freddie Mac Multifamily. He noted more than 85% of the units the GSE finances are affordable to residents earning 100% or less of the area median income.
According to the company’s Sustainability Bonds Framework, the proceeds of Freddie Mac’s Sustainability Bonds will be used to finance multifamily properties that (a) finance affordable housing to low-to-moderate-income families, (b) may have features, or are located in areas, that further economic opportunity for residents and (c) may include certain environmental impact features.
The inaugural FREMF K-SG01 transaction will be backed by eligible 10-year fixed-rate loans selected in accordance with Freddie Mac Sustainability Bonds Framework. Proceeds from the underlying loans are used to finance rental properties that serve low-to-moderate-income families. Certain properties have environmental features: Existing Energy/Water Efficiency Improvements, Building Standards for Energy-Efficiency or Transit-Oriented, and located in areas that further economic opportunity or residential economic diversity.
StepStone Real Estate Closes Fund IV With $1.4 Billion in Capital Commitments
StepStone Real Estate, New York, closed StepStone Real Estate Partners IV, its fourth in a series of funds focused on special situations secondaries and recapitalizations of real estate vehicles.
SREP IV’s $1.4 billion final closing exceeded the $1 billion target for the fund. Approximately $870 million of the commitments closed after the advent of the COVID-19 pandemic.
Latham & Watkins LLP served as legal advisors for the fund’s formation .
SREP IV is double the size of its predecessor, SREP III, which closed in February 2017 with $700 million in primary commitments and invested capital of approximately $1.2 billion including capital from co-investors.
SREP IV is a continuation of a strategy pioneered by SRE’s partners during the global financial crisis of 2008 and subsequent recovery period. Prior to the global financial crisis, SRE’s principals were investors in the traditional secondaries sector, focused on acquiring passive limited partnership interests in funds. In 2009 they pivoted to partnering with managers to focus on special situations, secondaries and recapitalizations. These investments have included working with managers to recapitalize their real estate vehicles and/or acquiring their limited partners’ interests in long-dated funds and other types of real estate vehicles, as well as incorporating infusions of fresh capital to help managers expand their portfolios.
