Advenir Inc. has secured a total of $172.8 million to refinance existing floating-rate debt on five apartment communities in Denver and Houston. HFF arranged the financing of the seven-year, fixed-rate loans in five separate transactions through Freddie Mac’s Capital Markets Execution Program.
“We have found this to be an opportunistic time to lock interest rates with fixed-rate loans for stable properties that exhibit a long-term ownership horizon,” said Stephen Vecchitto, managing director & principal of Advenir Inc., in a prepared statement. “These properties provide substantial current cash flow and continued market appreciation. While the original floating-rate debt allowed for the execution of the value-add business plan upon acquisition, the new fixed-rate debt allows for interest rate stability and a longer hold time frame for the asset.”
HFF worked with Advenir to mitigate interest-rate risk in the current rising rates environment. The average rate across all five loans is 4.3 percent, ranging from 4.2 to 4.3 percent. The average rate at the retirement of the LIBOR-based loans was 4.5 percent with rates ranging from 4.3 to 4.9 percent. The fixed-rate conversions provided the borrower with a reduction in the all-in-rate for each property with additional interest-only amortization.
The communities in the portfolio are currently a total of 94.6 percent leased and include:
- Advenir at Eagle Creek; 258 units; 10373 N. Sam Houston Parkway E. Humble, Texas
- Advenir at Woodbridge Reserve; 288 units; 15000 W. Airport Blvd., Sugar Land, Texas
- Advenir at Cherry Creek North; 345 units; 1090 S. Parker Road, Denver
- Advenir at Cherry Creek South; 292 units; 1211 S. Quebec Way, Denver
- Advenir at Del Arte; 351 units; 151 S. Joliet Circle, Aurora, Colo.
The HFF team included Senior Managing Director Eric Tupler and Managing Directors Josh Simon and Cortney Cole.
“Advenir took advantage of an opportunity to improve their debt position on each of these five assets and protect their investors in a rising interest rate environment,” Simon told Multi-Housing News.
Image courtesy of Yardi Matrix