Dealmaker: Capital One Lends $126M for Offices, Housing

Capital One, McLean, Va., provided a $40 million loan to refinance 161 William Street, a 22-story, 201,000-square-foot office building in lower Manhattan’s Insurance District.

Jack Resnick & Sons and the Ruben Cos., New York, jointly own the property. The sponsors used the proceeds to pay off an existing commercial mortgage-backed securities loan and to fund capital improvements.

The flexible-rate loan included five years of interest-only payments.

Capital One Vice President Jonathan Smith originated the transaction. “The property is well-located in lower Manhattan and has a long-term anchor tenant, Pace University,” he said, noting that Capital One financed a San Francisco office building for Jack Resnick & Sons last year.

The sponsors bought 161 William Street in 1978 and have consistently modernized it, including installing a new marble lobby, cooling tower, upgraded elevator control system and windows in 2009. Pace University has expanded its footprint in the building since it signed its first lease in 2001 and currently occupies 83.5 percent of the total square footage. In 2015, Pace University opened a new residence hall–the tallest in the world–next to the property. Its lease matures in 2021.

Capital One also provided $76.7 million in Fannie Mae loans for Kort & Scott Financial Group, a manufactured housing owner-operator. The loans, all for California properties, allowed Kort & Scott to refinance a manufactured housing community in Garden Grove, to acquire an apartment community in Norwalk and to refinance an apartment community in Van Nuys.

Senior Vice President Chad Thomas Hagwood originated the funds in three separate transactions. He noted that all went from application to funding in 45 days.

A $15.4 million Fannie Mae structured adjustable-rate loan refinanced Thunderbird Mobile Home Park, a 103-space manufactured housing community in Garden Grove. The 10-year loan included five years of interest-only payments, followed by amortization on a 30-year schedule. There is a 12-month lockout period with 1 percent exit fee thereafter until 90 days from maturity.

An $18.7 million Fannie Mae structured adjustable-rate loan refinanced Sepulveda Apartments, a 98-unit apartment community in Van Nuys. The 10-year loan included five years of interest-only payments followed by a 30-year amortization schedule.

A $42.6 million Fannie Mae structured adjustable-rate loan for IMT MetroPointe, a 249-unit apartment community in Norwalk. Capital One financed this transaction under Fannie Mae’s Green Rewards Mortgage Loan program.

Hagwood noted that Kort & Scott plan to implement several energy- and water-efficiency measures including xeriscaping, low-flow aerators and programmable thermostats to achieve at least a 20 percent reduction in energy and water consumption. He said the Fannie Mae Green Rewards program allows a lower interest rate, up to 5 percent in additional loan proceeds and improved net cash flow through underwriting of a portion of the projected energy savings.

Capital One also lent $9.3 million to Equity LLC, Hilliard, Ohio, to refinance a 34,000-square-foot medical office building in Lake Worth, Fla. The Lake Worth Medical Center, which Equity constructed in 2008, is five miles from the 412-bed JFK Medical Center and four miles from Select Medical, a 60-bed rehabilitation center. The fully leased building includes a surgery center, a primary care clinic, a physical therapy provider, an orthopedic surgeon and an imaging center.

The loan represented the sixth transaction Capital One has closed with Equity.