Dealmaker: NorthMarq Capital Arranges $163M for Multifamily

NorthMarq Capital, Minneapolis, secured $163 million to refinance four multifamily properties in California, Nevada and Idaho.

In California’s Silicon Valley, managing director Nathan Prouty, vice president Andrew Slaton and senior investment analyst Briana Harney arranged $134 million for 340-unit property Orchard Glen and 173-unit Park Central. The transactions were structured on 10-year interest-only terms.

A life insurance company supplied the funds to Prometheus Real Estate Group, San Mateo, Calif.

“The existing loans on these two properties were arranged in a higher interest rate environment and therefore the borrower was looking to refinance the loans and secure long-term debt at today’s lower interest rates,” said Prouty. “The correspondent life company offered a competitive full-term interest-only refinance option which minimalized prepayment costs, increased proceeds and locked in attractive interest rates on these two properties.”

In Las Vegas, NorthMarq Vice President Aaron Beck secured $17 million to refinance a 280-unit apartment property through Fannie Mae’s Green Rewards program. As a result, the fixed interest rate for the loan locked in at more than 35 basis points below a conventional Fannie Mae execution, Beck noted. “This refinance provided substantial cash out for the borrower with a sub-4 percent fixed interest rate,” he said. “The sponsor committed to making improvements at the property that reduce water consumption according Fannie Mae’s Green Rewards program. In turn and at a nominal cost, the sponsor is realizing an increase in cash flow due to the reduced rate.”

NorthMarq Capital Senior Vice President Steve Hollister negotiated the $12 million refinance of a 140-unit multifamily property located in Boise, Idaho. A life insurance company supplied a 15-year loan with a 30-year amortization schedule. 

“The interest rate was locked in August 2017 when the asset was under construction and 50 percent leased,” Hollister said. “The lender provided nine months from rate lock to funding to allow for completion of construction and stabilization, enabling the borrower to mitigate interest rate risk.”

The 65 percent loan-to-value, 15/30 loan priced at 165 basis points over the 15-year U.S. Treasury, Beck said.