NJ Affordable Housing Portfolio Lands $60M Loan

RED Mortgage Capital has secured the financing for the acquisition of 18 multifamily properties in Union City through Freddie Mac’s Optigo Small Balance Loan program.
Union City Palisade, one of the properties in the portfolio. Image courtesy of RED Mortgage Capital

RED Mortgage Capital—the lending arm of ORIX Real Estate Capital—has closed a $60 million loan for a portfolio of 18 properties located in Union City, N.J. The financing went to the acquisition of the multifamily properties that encompass 481 units of affordable housing. Each property in the portfolio includes between eight and 67 units. The financing was originated through the Freddie Mac Optigo Small Balance Loan (SBL) program. John Darrow, Jim Martin and Harris O’Connell with RED’s SBL Team negotiated the portfolio transaction along with Progress Capital’s Brad Domenico.

Well-engineered approach

The Union City transaction is among RED’s largest SBL portfolio financings. Over the last year, as the Columbus, Ohio-based debt provider has toiled to grow its volume of portfolios financed, RED has closed 11 SBL portfolios totaling more than $200 million in loan proceeds across 75 properties.

RED’s ability to provide competitive terms and certainty of execution on such a large portfolio could not have happened without RED’s highly-efficient, well-engineered approach to small balance lending,” Domenico said in a prepared statement.

The Optigo SBL program from Freddie Mac is a competitive option for loans extending from $1 to $7.5 million secured by multifamily properties nationwide. The initiative brings liquidity and stability to a market sector formerly fractured geographically and often circumscribed by sponsor limits or market exposure constraints. For the Union City transaction, RED’s SBL team pulled together the simultaneous closing of 18 individual loans. That consolidation enabled lower closing costs and improved pricing.

Our team continually seeks to improve the customer experience, leveraging technology and decades of industry experience to provide our clients a seamless execution on every transaction in this high-volume space,” RED’s John Darrow reported in a written statement. “The focus on customer experience has allowed RED to establish itself as a pre-eminent capital provider in the small balance space.”