Kairos Secures $175M Financing Backing Affordable Housing
The credit facility, originated by Berkadia, is backed by Fannie Mae.
Kairos Investment Management Co. has secured a $175 million credit facility backed by Fannie Mae to grow and advance its affordable housing portfolio. The credit facility was originated by and will be serviced by commercial lender Berkadia.
In a prepared statement, a KIMC official explained that the new credit facility will provide KIMC with the additional capital flexibility and bulk to leverage outstanding market opportunities. The official noted that KIMC seeks value-oriented opportunities.
The Berkadia-serviced credit facility provides KIMC superior financing rates than leveraging one-off lending transactions. The 20-year facility term allows Kairos to close different loan tranches bearing an array of maturities, enabling the firm to better manage long-term financing risk and future capital events.
The facility brings together fixed- and floating-rate tranches, permitting greater pliability in interest rate management. It also affords the capability of adding or removing different assets to the collateral pool, without prepayment penalties being levied.
In addition to benefiting from very low cost of capital and flexible terms, the transaction is likely to generate substantial credibility from potential sellers, who will realize financing is readily available, enabling them to secure new acquisition opportunities quickly.
In recent months, KIMC has acquired a number of properties, including a 195-unit affordable multifamily community in Las Vegas, Nev., a 238-unit affordable community in the Atlanta area, and a 103-unit affordable property in Glendale, Colo., among others. Several months ago, Lument closed on a $47.5 million Fannie Mae multifamily housing loan to fund construction of an income-restricted community in Colorado.