INSIDE THE DEAL: Capmark Originates $3.9M Loan to Finance Newly-Constructed Apartments
- Jan 13, 2009
By Keat Foong, Executive EditorOcean Springs, Miss.–In the current environment, brand-new institutional quality apartments in healthy markets are still readily financed, and this transaction provides an example. Capmark Finance Inc. originated $3.9 million in fixed-rate financing through its Freddie Mac program for the borrower’s purchase of the newly-constructed Dominion Apartments from the original developer. “This was an excellent brand new property that had just completed leasing,” said Chad Hagwood, senior vice president of Capmark’s Birmingham, Ala. office. Hagwood, who originated the loan, characterized the market as “very good,” and he said the borrower and management companies were both “excellent” and had a lot of experience in the market. The regional apartment market in which Dominion is located exhibits a little softness, but overall it is a very attractive, he said. And although the average market occupancy is closer to 92-93 percent, Dominium had 100 percent occupancy. The loan originated by Capmark will be used to pay off the seller’s construction loan with a local bank. The loan has no prepayment penalty. Located on approximately three acres at 310 Holcomb Boulevard, the garden-style multifamily property is comprised of five two- and three-story buildings featuring 56 one- and two-bedroom units. Amenities include a swimming pool and a garden/picnic area. The borrower was an affiliate of Mississippi-based Dawn Properties Inc.