Dealmaker: NorthMarq Arranges $104M in Multifamily Refis
NorthMarq’s Chicago office arranged $103.5 million to refinance six multifamily assets in Iowa, Missouri and Indiana.
Brett Hood, Senior Vice President of NorthMarq’s Chicago office, secured $89 million in combined FHA debt to recapitalize five multifamily properties in Davenport, Iowa and Kansas City, Mo.
All five properties were encumbered with existing FHA debt and therefore eligible for HUD’s 223a7 refinance program. The refinance allowed the sponsor to capitalize on lower interest rates, extend loan amortization and improve property cash flow with reduced debt service. Loan amounts ranged from $8.8 million to $21.7 million.
“The nature of the 223a7 program enabled a streamline refinance with certainty of execution in a volatile Covid-19 environment,” said Hood. “The sponsor is an experienced HUD borrower and recognized the current interest rate environment as an opportunity for a rate-reset and cash flow savings.”
Two of the subject properties, Bennington Ridge Apartments and Bennington Park Townhomes, are in Kansas City. Bennington Ridge was constructed in 2000 with 288 one- and two-bedroom units; Bennington Park was constructed in 1988 and includes 164 two- and three-bedroom townhome units. The three remaining properties, Jersey Meadows, Ashford and Alexis at Perry Pointe are in Davenport. Jersey Meadows was constructed in 1985; Ashford and Alexis at Perry Pointe date to 2004.
Hood also arranged $14.5 million in acquisition financing for Lexington Green and Villa Capri, a mission-driven property with 237 units in Speedway, Ind. near Indianapolis. The 10-year fixed-rate loan included three years of interest-only payments followed by a 30-year amortization schedule.
The 1966-vintage property was partially renovated by the seller and the sponsor intends to continue the renovation program following acquisition.
Historically a bank borrower, the transaction represented the sponsor’s first agency execution, Hood said. “The transaction was well aligned with Freddie Mac’s mission-driven initiative and the closing process allowed this first-time agency sponsor the ability to acquire a quality workforce housing property under a compressed acquisition timeline,” he said.
