Hunt Real Estate Capital provided conventional Fannie Mae multifamily loans in the amount of $35.2 million in a cash-out refinance of a four-property multifamily portfolio located in Reading, Pennsylvania.
The loans have a 12-year term, 11.5-year yield maintenance and 30-year amortization. All of the loans carried Green Rewards pricing provided through planned water conservation upgrades.
They are backed by a local sponsor and management company, whose real estate portfolio consists of 2,000 multifamily units in 15 multifamily properties. Hunt Real Estate Capital financed Reed Farm just last year, which was the sponsor’s first Fannie Mae DUS loan.
James Conley of HFF in Philadelphia represented the sponsor.
“These loans were rate locked at application in early August under the Fannie Mae Streamlined Rate Lock Program. The sponsor was extremely rate sensitive and to achieve his target we needed to close in just 45 days,” noted Bryan Cullen, Managing Director at Hunt Real Estate Capital.
The properties include:
- A 161-unit multifamily community built in 1960 that enjoys good visibility and access to the major interstate highways in Reading. Hunt Real Estate Capital provided a loan for $10.7 million to refinance this property. In addition to the green repairs, the borrower plans on roof, drainage and asphalt repairs. Property amenities include private off-street parking and a laundry facility.
- A $10 million loan to refinance a 97-unit apartment complex built in 1969 with very good visibility and access to the major interstate highways located nearby. Over the course of 2016-2018, the borrower implemented a variety of internal and external improvements. Green upgrades and asphalt parking areas will be repaired as part of the refinance. The community features private off-street parking and a playground.
- A 77-unit garden-style apartment complex built in 1968, which Hunt Real Estate Capital refinanced with a $4.6 million loan. In addition to water savings measures, there will be boiler replacement and asphalt work. The community features private off-street parking and a laundry facility, and this property is in good condition and offers good visibility.
- A $9.9 million loan to secure a 156-unit garden-style apartment complex built in 1950. Along with the water saving upgrades, the sponsor will be spending another $100,000 on exterior needs. The property has good visibility and access to the major interstate highways and offers residents private off-street parking, a playground, and a laundry facility. The borrower recently completed a number of property improvements.
The City of Reading is in the north central portion of the Reading CBSA and is 37.5 miles southwest of Allentown’s CBD and 65.4 miles northwest of Philadelphia’s CBD. Reading’s manufacturing-heavy economy is gaining traction, and the metro area has entered late-cycle expansion.
Cullen added, “Interestingly, we locked the loans at a total of $33.9 million but, with the delivery tolerance built into the sale of the securities, we could move the loan amount up or down up to 5% without penalty before funding. In this case improved operations and strong appraisals allowed us to up the dollars by 4%.”