KeyBank Real Estate Capital has originated a total of $125 million in Freddie Mac first mortgage loans for two multifamily properties in California. Robert Prouty of Key’s Commercial Mortgage Group arranged the financing for both properties; both deals represented the refinancing of existing loans.
A $72.4 million fixed-rate loan was secured by The Paseos Apartment Homes, a 385-unit, mid-rise multifamily property in Montclair, Calif., which is in southwestern San Bernardino County. The property was built in 2014 and is comprised of 15 three-story apartment buildings. The refi loan has a 10-year term, five-year interest only period and 30-year amortization schedule.
Separately, a $52.6 million fixed-rate loan was secured by The Piero, a 225-unit, garden-style apartment community in Los Angeles. The property was built in 2004 and is comprised of a single apartment building with three unit types available, ranging from 468 square feet to 1,218 square feet. The loan has a 10-year interest-only term.
Multifamily Mortgage Lending Still Strong
Though interest rates are rising, they are still historically low, and so the pace of mortgage lending in the multifamily space is still strong, though refinancing isn’t quite as brisk as in recent years.
According to the Mortgage Bankers Association, multifamily properties saw the highest volume of mortgage bankers’ origination volume during the first quarter of 2018, coming in at $233.9 billion, followed by office buildings, retail properties, hotel/motel, industrial and health care. First liens accounted for 96 percent of the total dollar volume closed.
“2017 was a very strong year, driven by solid property fundamentals, rising property values, low interest rates, and a ready supply of mortgage capital all contributing to attractive finance markets,” Jamie Woodwell, MBA’s vice president of commercial real estate research, said in a statement in April. “We expect another robust year in 2018, even with the slight increase in interest rates, although perhaps not quite as robust as 2017.”