By Jeffrey Steele
Hunt Mortgage Group has refinanced a portfolio of five New Jersey multifamily properties for the same sponsors. The company furnished a total of $15.2 million for the five Freddie Mac Small Balance Loans. The borrower is Norse Holdings.
The properties include:
- Beachview Gardens. This 44-unit property located at 544-560 Beachway Avenue in Keansburg, N.J. is 97 percent occupied. It features a pair of two-story structures offering 38 one-bedroom, one-bath apartments and six two-bedroom, one-bath apartments. The borrower recently poured more than $260,000 into capital improvements. Hunt Mortgage Group’s investment was $4.6 million.
- Clementon Norse Apartments. Located at 222 White Horse Pike in Clementon, N.J., this property features 48 one-bedroom, one-bath units, and eight two-bedroom, one-bath apartments. The borrower invested $122,900 in capital improvements in the past 25 months. Hunt Mortgage Group provided a loan of $4.4 million to refinance the apartment community.
- 165 Quincy Ave Apartments. Located in Kearny, N.J., this property features a two-story building with five one-bedroom, one-bath units and four two-bedroom, one-bath apartment homes. The borrower invested $52,975 in capital improvements, while the Hunt Mortgage Group loan totaled $1 million.
- 388 Smith Street. Hunt Mortgage Group invested $1.3 million to refinance this rent-controlled, 12-unit Perth Amboy, N.J. multifamily property comprised of a single two-story building. The building features nine one-bedroom, one-bath units and three two-bedroom, one-bath apartments. The borrower invested $69,150 in capital improvements to 388 Smith Street.
- Woodbine Apartments. This is a 48-unit multifamily property situated at 300 Broadway in Westville, N.J. The three-story building features 42 one-bedroom, one-bath apartments, and six two-bedroom, one-bath apartments. Hunt Mortgage Group invested $3.8 million to refinance Woodbine Apartments, and the borrower competed $89,050 in capital improvements.
Plenty of value
The “biggest challenge was the rising interest rate putting pressure on maximizing the cash-out proceeds,” Kristian Molloy, Hunt Mortgage Group vice president, told MHN.
“The market is solid with low cap rates, so there was plenty of value. The Freddie Mac Small Balance product allows for the rate to be held at application. So as long as you meet the time lines established up front the borrower is able to keep the rate.”
The new loan’s proceeds will be used to continue to improve the properties, as well as finance future acquisitions of other properties, said Hunt Mortgage Group managing director Steven Cox. “In order to maximize cash-out proceeds for each deal, we had to mix and match different loan terms for the various properties, because of the different markets they are in,” he added. “The borrower is a seasoned, quality multifamily commercial real estate and multifamily investor, as well as a repeat Hunt Mortgage Group client. We were pleased to partner with them again on these deals.”