Berkadia Originates $80M Refi for Florida Asset

The new seven-year, fixed-rate loan with three years of interest-only payments replaces an $80 million floating-rate loan Berkadia secured in 2018 for Advenir’s 540-unit property in Palm Beach Gardens.
Turnbury at Palm Beach Gardens. Image courtesy of Berkadia

Advenir has refinanced Turnbury at Palm Beach Gardens, a 540-unit multifamily community in Palm Beach Gardens, Fla., it acquired just over a year ago, with a new $79.5 million seven-year, fixed-rate loan. The refinancing replaces the $80 million Freddie Mac Value Add Loan Advenir used to purchase and begin renovating the 45-year-old property.

Berkadia, which secured the original Freddie Mac loan in February 2018, originated the new loan that is interest-free for three years and has a loan-to-value ratio of 80 percent. The financing secured in 2018 was a three-year, floating rate loan with interest-only payments and an 82 percent LTV.

“In the value-add financing, Freddie Mac provides more leverage than they normally would if the borrower is spending $10,000 per unit. Half of that has to be spent inside the units and the other can be spent outside the units,” Charles Foschini, Berkadia senior managing director, told Multi-Housing News.

Managing Director Christopher Apone and Analyst Lourdes Carranza-Alvarez, all located in Berkadia’s Miami office, also helped arrange the refinancing for Adevnir.

When Advenir acquired the property at 4120 Union Square Blvd. last year, it changed the name from The Fountains to Advenir at PGA and then to Turnbury at Palm Beach Gardens. Built in 1974, the multifamily asset has one-, two- and three-bedroom units. Community amenities include three swimming pools, summer kitchen with grilling station, 24-hour fitness center, basketball court, fitness trail and a bark park. Upgrades are being made to the interiors, which offer walk-in closets, dishwashers, crown molding and balconies.

To receive the refinancing from Freddie Mac, the borrower must continue to complete the upgrades to the property, Foschini said.

“What’s particularly interesting about this transaction is while the borrower was still making improvements, the fixed-rate interest rate moved in his favor,” Foschini explained, adding the change allowed the borrower to convert the financing from a floating rate to a fixed rate slightly ahead of schedule.

“The property has an exceptional location. They are upgrading the units to be more contemporary for today’s renter,” he told MHN.

Situated just north of West Palm Beach, Fla., the apartment community is less than five minutes from Interstate 95 and 10 minutes from The Gardens Mall, a 1.4 million-square-foot mall with more than 160 shops and restaurants. Nearby recreational areas include John D. MacArthur State Park and Juno Beach, which are about 15 minutes away.

Financing Deals for Advenir

“Advenir is an extremely active buyer and very astute investor,” Foschini told MHN. “They do a mix of fixed and floating rate loans as the various opportunities present themselves with the specific properties.”

In February 2018, the Berkadia team of Foschini, Apone and Carranza-Alvarez arranged a $39.5 million Freddie Mac refinance loan for Advenir at the Oaks, a 408-unit community in the Orlando submarket of Ocoee, Fla., also owned by Advenir. The seven-year term loan offered three years interest only at a competitive interest rate. It was originated with a 75 percent LTV ratio.

In November, a team from HFF secured a $55.2 million seven-year, fixed-rate loan through Freddie Mac’s Capital Markets Execution (CME) program, for Advenir at French Quarter in a Denver suburb. The community has 436 units in 26 buildings spread across 14 acres in Aurora, Colo.

Most recently, HFF helped Advenir secure $190.8 million in Freddie Mac financing for a multifamily portfolio encompassing 1,843 units across six properties in Alabama, Colorado and Texas.