Detroit’s Top 10 Lenders of 2018
- Mar 19, 2019
Detroit is currently going through something of a comeback, with growing investment and construction in the multifamily sector. More than 2,700 units are expected to come online this year, nearly 10 times more than 2018’s total deliveries. The market’s low entry costs and good acquisition yields are slowly attracting investors.
Similarly, lending activity has increased in the metro. A total of nearly $1.6 billion (an increase of more than 22 percent from 2017) in multifamily loans were originated in 2018, serving just under 21,000 units across 99 properties. The average per unit loan reached $82,118, while the largest single loan was provided by PGIM—an $87 million financing package for a West Bloomfield, Mich., community.
Unsurprisingly, government-sponsored enterprises provided a significant chunk of all loans originated during 2018, with Fannie Mae and Freddie Mac providing a combined $408.2 million in financing. Following is a list of 2018’s top multifamily loan providers, by dollar volume, based on data provided by Yardi Matrix.
10. SunTrust Bank
SunTrust Bank provided financing for four Detroit communities in 2018. Two were provided for ID Real Estate, which closed on a portfolio transaction comprising the 118-unit Weathervane and the 208-unit Country Squire properties. The two bridge loans, each valued at $15.8 milliofn, are due 2020. SunTrust Bank also originated an $8.6 million acquisition and development loan for Birch Hill, as well as a $16.4 million loan for Hoover Square, both owned by GSH Group.
Citibank provided a total of $69.4 million in loans, for three properties in metro Detroit. Comprising more than 1,100 units, the communities were completed between 1966 and 1976. Village Green of Waterford and Village on the Park were both acquired by RESSCO in 2018 and received 10-year loans from Citibank, at $23.6 million and $19.2 million. The bank also provided a $18.5 million CMBS loan for Midwest Capital Management’s 346-unit The Oxley. The CMBS loan, originated by Berkadia Commercial Mortgage, has a fixed 4.86% interest rate and is due 2033.
8. Freddie Mac
A total of $86.4 million in Freddie Mac loans were originated in 2018, for seven Detroit communities totaling just under 1,700 units. The largest of these is a $28.5 million, 15-year permanent loan, originated by Wells Fargo Bank on behalf of Lautrec for its property, the 394-unit Thornberry, located in the West Bloomfield submarket. Six of the properties Freddie Mac helped finance were constructed before 1990, while the seventh opened its doors in 2000.
7. PGIM Real Estate Finance
PGIM Real Estate Finance provided the largest single multifamily loan in Detroit last year, an $87 million mortgage for Aldingbrooke, a 667-unit community situated in West Bloomfield, Mich. The new loan retires a prior, $70 million CMBS line of credit, originated in 2011. PGIM worked on behalf of owner Beztak Properties to obtain the permanent loan. Aldingbrooke is located at 6350 Aldingbrooke Circle Road, and offers one-, two- and three-bedroom units ranging from 1,000 to 2,800 square feet.
6. Wilmington Trust
The Delaware-based firm provided a total of $108.8 million in multifamily loans, spread across seven properties. All of them are CMBS loans, averaging just over $15.5 million per property. The largest of these is a $23.9 million loan provided for the 337-unit Woodland Gardens, located in the Oak Park submarket. The asset is under the ownership of Lightstone Group. Terms include payments of $125,238 per month, interest-only at a note rate of 4.8% for 60 months, followed by a calculated amortization rate under a 30-year basis. The loan is due 2028.
5. M&T Bank
M&T Bank provided a total of $108.9 million in three loans during 2018. Two of the financed properties are owned by Fairfield Residential: Spring Valley, a 224-unit community situated in Farmington Hills, Mich., and the 544-unit Oaks at Hampton, located in Rochester Hills, Mich. Both properties became subject to the same CMBS pool, totaling $750 million. Spring Valley received an allocation of $27.5 million, while Oaks at Hampton was financed with $66.5 million. The Nadeer Group also received financing from M&T Bank, totaling $14.9 million for its 426-unit Sky Gate property.
4. Canadian Imperial Bank of Commerce
A total of four Detroit properties were financed with help from the Canadian Imperial Bank of Commerce, totaling $135.7 million in loans. The firm provided loans for two properties owned by Hokanson Capital. Auburn Gate, a 584-unit community in the Auburn Hills submarket received $60.8 in financing, while The Trilogy, comprising 620 units in the Belleville submarket, obtained $39.7 million from the Canadian bank, with another $27 million as a self-financed loan. The other two properties which received financing from the Canadian Imperial Bank of Commerce are owned by Princeton Enterprises. The company received $5.5 million for Fenimore Court in downtown Detroit and $2.7 million for Rivercrest of Clinton Township.
The U.S. Department of Housing and Urban Development financed a total of nine Detroit-area properties in 2018, which received $147.4 million in loans from the government agency. A total of 445 fully affordable units, comprising four properties, were funded. One of them, the 81-unit Madison Manor, is also an age-restricted community which received a $2.6 million HUD 223(f) loan, which amortizes on a 35-year schedule and carries a note rate of 4.05 percent. RED Capital Group originated the financing. The largest loan originated by the agency in 2018 was for Beztak Properties’ upcoming 192-unit community, Orchard Mews, currently in the planning stages. The property received a HUD 221(d)(4) loan in the amount of $42.3 million, amortizing on a 43-year schedule.
2. U.S. Bank
U.S. Bank funded a total of 12 properties in Detroit last year, totaling $234 million. Four of these properties are owned by Lautrec and received loans ranging from $5 million to $12.3 million, all originated by Wells Fargo Bank. The largest financing package provided by U.S. Bank is a $85.5 million, 10-year CMBS loan for Riverfront Towers, a 554-unit community in downtown Detroit under the ownership of Image Capital. Loan terms include payments of $429,642, at a note rate of 4.43 percent.
1. Fannie Mae
A total of $321.9 million in loans was originated through Fannie Mae in 2018. The government-sponsored enterprise provided financing for 18 properties in metro Detroit, comprising 3,296 units. The two largest Fannie Mae loans were both originated by Greystone Servicing Corp. on behalf of Singh Development for two properties in the Novi submarket. The 260-unit The Brownstones received a $32.3 million, 10-year loan, while Main Street Village, a 387-unit community, was subject to a $50.2 million loan with a note rate of 2.95 percent.
Images courtesy of Yardi Matrix