Dealmaker: Berkadia Secures $63M for Multifamily Assets

Berkadia’s Chicago team arranged $48.5 million for Bush Temple at 800-812 N. Clark, a multi-phase 230-unit apartment property with ground-floor retail in Chicago’s Near North neighborhood.

Director Michael Slovitt and Senior Managing Director Chris Blechschmidt secured the insurance company loan for a Cedar Street Cos. affiliate and its equity partner.

Slovitt and Blechschmidt structured the 20-year loan to finance the recapitalization of a 101-unit mixed-use project currently in lease up, the construction of a new 129-unit, 15-story tower and the long-term permanent financing upon completion of both phases. The fixed-rate financing included a predetermined earnout structure to up-size the loan and recoup equity without selling or refinancing.

“The long-term fixed-rate nature of the capital was critical to the success of the transaction,” Slovitt said. “It took interest rate risk off the table, which has been a recent hot-button issue for many sponsors and equity investors. This was a scarce product, as not many in the marketplace offer 20-year construction-to-perm debt.”

Berkadia also provided $7.05 million in Freddie Mac financing against Grandeagle Apartments in Greenville, S.C., for QPG Glenwood Apartments LLC. Director Josh Finley of Berkadia’s Atlanta office secured the acquisition financing.

The seven-year fixed-rate financing priced at 4.84 percent with the first two years interest-only.

Finley also secured a 12-year $7.92 million Fannie Mae fixed-rate loan for Quail Ridge Apartments in Columbus, Ga., for sponsor Quail Ridge GA LLC. The 4.99 percent loan with five years of interest-only payments qualified for Fannie Mae’s Green Rewards program. Sponsorship elected a declining prepayment schedule, allowing flexibility for a lower prepayment penalty during the term as opposed to a standard yield maintenance.

Finley noted both Grandeagle and Quail Ridge represent value-add plays for the new owner. “[These deals] showcase that there are still ample value-add opportunities in key secondary markets,” he said.