Dealmaker: NorthMarq Capital Secures $62M for Multifamily

NorthMarq Capital, Minneapolis, secured $62.3 million for multifamily assets in Washington and Wisconsin.

In Yakima, Wash., NorthMarq Vice Presidents Conor Freeman and Aaron Beck arranged $23.7 million to refinance 330-unit property Castle Creek Apartments. The 20-year loan included a 30-year amortization schedule.

Freeman and Beck arranged the financing through the Fannie Mae Delegated Underwriting and Servicing program.

“The borrower elected to pay a prepayment penalty and refinance out of their existing Fannie Mae loan well before maturity in order to lock in today’s low interest rates, while also receiving significant cash out,” said Freeman.

Beck noted Fannie Mae’s Streamlined Early Rate Lock program allowed the borrower to manage interest rate volatility by locking the index and spread two weeks after application.

NorthMarq Senior Vice President Brett Hood also arranged $38.6 million in permanent financing to recapitalize Rivershire and Riverwood Apartments in southwest suburban Milwaukee. The two properties stand across the street from one another and total 54 garden-style buildings with 432 units. The 10-year fixed-rate loan represented a 78-percent loan-to-value ratio.

Hood arranged the financing through the Freddie Mac Green Advantage Program. He structured the loan with four years of interest-only payments followed by a 30-year amortization schedule.

“The transaction represented a significant cash out for the sponsor, who originally developed the collateral between 1989 and 1999,” Hood said. “NorthMarq and Freddie Mac collectively got comfortable with the large equity recapture given the asset’s steady historical performance coupled with the sponsor’s continued investment through property renovations.”

Hood said the owner invested $2.7 million on capital improvements over the past five years including a new clubhouse, expanded community room and renovated leasing office.

“Freddie Mac’s Green Advantage execution, whereby the sponsor agrees to undertake certain energy savings projects post-closing, enabled the sponsor to maximize loan proceeds while offering a substantially reduced coupon rate,” Hood said. “Furthermore, the borrower elected to eliminate interest rate risk early in the process through Freddie Mac’s Index Lock feature.”