Hunt Real Estate Capital, a leader in financing commercial real estate throughout the United States, announced today it provided a Fannie Mae conventional multifamily loan in the amount of $35.8 million to refinance a multifamily property located in Doylestown, Pennsylvania.
Center Square Towers is a mid-rise apartment building that is comprised of two buildings containing 350 units. The buildings were developed in 1975 with 206,764 square feet of rentable space situated on 12.19 acres of land. The community was renovated in 2014 and offers 172 studio units and 178 one-bedroom apartments. The property offers residents 353 open parking spaces.
“Center Square Towers was purchased by the borrower in 2014, and Hunt Real Estate Capital provided $25.7 million in acquisition financing to facilitate the deal,” commented Bryan Cullen, Managing Director at Hunt Real Estate Capital. “In 2016, we provided a supplemental loan totaling approximately $4 million.”
The latest financing features a 10-year term with five years of interest-only payments followed by amortization based on a 30-year schedule. Yield maintenance will apply during the first 114 months with a 1% prepayment thereafter with the last 90 days open. The borrower is a TIC structure related to the original 1031 exchange transaction used to purchase the property.
Borrower Chris Zentgraf added, “We chose to pay a fairly large yield maintenance penalty, but it was worth it due to the low fixed rate, longer interest-only period, and the amount of proceeds from the refinance.”
“Since acquiring the property, the borrower has invested approximately $3.3 million in capital improvements and amenities on-site to better meet the needs of the changing tenant profile,” added Cullen.
Upgrades performed since acquisition include upgrades to the two main roofs, mechanical components and other building systems, and appliance and furnishing upgrades throughout the units, including kitchen and bath renovations. In addition, property amenities were improved and a large parking lot was added.
The refinancing qualified for Fannie Mae Green Rewards, with planned improvements projected to result in 15.6% in energy savings and 17.1% in water savings.
“We first completed a green report to make sure the borrower qualified, and just after we completed it the treasuries rallied,” added Cullen. “We rate locked within a day of the borrower requesting it, and the total loan process took 49 days.”
Center Square Towers is located in Doylestown, within the Philadelphia MSA. Recognized as the birthplace of the United States, Philadelphia is the eighth-largest metropolitan area in the United States and has a diverse economy geared towards biomedical, information, and service-based industries. Philadelphia is home to 12 colleges and universities, including Temple University, University of Pennsylvania, Villanova University, Saint Joseph’s University, and LaSalle University.