Berkadia Secures $96M for PA, VA Properties

By Jeffrey Steele

Berkadia’s HUD team has secured financing totaling more than $96.2 million for three properties through the HUD 223(f) and 221(d)(4) programs.

HUD required less than 45 days to process two loan applications negotiated by Berkadia Philadelphia office senior directors Joseph DeGiorgi and Matt Cullison. These loans were originated on behalf of borrower PMC Property Group through the HUD 223(f) loan program. Totaling more than $67.1 million, the loans represented two of the largest HUD 223(f) loans originated in Center City Philadelphia in the last half decade.

The swift processing showcased HUD’s ability to move quickly. That’s been a hallmark of HUD’s Transformation Program. Both loans featured 35-year loan terms, as well as 3.15 percent interest rates and 80 percent loan-to-value ratios. 

Third property

The third property was financed through the 221(d)(4) program. That asset was Moore’s Lake Apartments at 10200 and 10220 Jefferson Davis Highway in Richmond, Va. A $29.1 million construction loan was secured by Berkadia Richmond office senior managing director David Blake and senior director Steve Murden.

“The project was delayed for a decade by the recession and the real estate slump that started in late 2007, and then by cash proffers initiated by Chesterfield County which were potentially over $18,750 per unit,” Blake told MHN. “This amount was deemed unrealistic by the development team because the proffers required were as much, if not more than, the value of the land per unit.

“Since then, Chesterfield County has been focused on revitalizing the Jefferson Davis Highway corrido. And our clients, Phil Roper and George Emerson, convinced the county that projects like Moore’s Lake will boost the revitalization effort and help drive commercial income to the county.

“With recent changes to the law in Virginia regarding municipal proffers, the developers were able to negotiate a lower proffer amount, but were still required to build an access road which will service the apartments as well as future commercial developments. Berkadia worked with the Developer and General Contractor and was able to include a portion of the costs within the HUD loan proceeds and offsite development costs.”

Warm recollections

This loan features a 3.60 percent interest rate and an 85 percent loan-to-cost ratio. The 40-year loan was obtained for borrower Moore’s Lake LLC, whose team was made up of Phil Roper and George Emerson.

“Moore’s Lake presented an opportunity to help our longstanding clients, both residents of the area themselves, in their effort to assist Chesterfield County in the revitalization of the Jefferson Davis Highway corridor.” Blake said. “Moore’s Lake is fondly remembered by local residents as ‘the old swimming hole and dance hall,’ built in 1950. The new plans call for an urban-style development in a suburban setting and offer housing options that were not available in this portion of Chesterfield County until now.”