Dealmaker: Red Mortgage Capital Funds $19M for Southeast Apartment Properties

Red Mortgage Capital LLC, Columbus, Ohio, funded $18.5 million to finance a five apartment property portfolio in North Carolina and Georgia.

Sponsor MACC Properties, Gastonia, N.C., borrowed the funds for:

–Village Square Apartments in Monroe, N.C., 25 miles southeast of Charlotte
–Parkway Apartments in Winston-Salem, N.C., 80 miles northeast of Charlotte
–Colonial House Apartments in Hickory, N.C. 55 miles north of Charlotte
–The Meadows at Edgemont in Gastonia, 22 miles west of Charlotte, and
–Fairway Village Apartments in Augusta, Ga.

Avison Young Vice President Aaron Prager and Principal Justin Piasecki brokered the deals.

Red Vice President and Originator Darrin Cook called MACC’s portfolio a good fit for the firm’s small balance multifamily program. “The sponsors were able to receive significant cash-out proceeds and obtain below 4 percent fixed interest rate for 10 years,” he said. “The loans all were non-recourse and provided two years of interest-only. The interest-only component significantly enhanced their monthly cash-flow and allowed the sponsor to put improvement monies back into the properties.”

Cook said Red’s non-recourse small balance multifamily program allows loan amounts up to $7.5 million and provides loan-to-value leverage structures up to 80 percent. “It also provides fixed rates up to 10 years and hybrid adjustable-rate mortgage products with 20-year terms, he said. “Borrowers are able to maximize their cash flow with interest-only payments and select from a variety of flexible pre-payment options.”

Cook noted that the sponsors have more than 15 years of experience in owning and managing multifamily properties in the southeastern U.S.