NorthMarq Arranges $73M in Financing for Midwest Portfolio

The three properties total 721 apartments and are located in Nebraska and Iowa.
Old Market Lofts. Image courtesy of NorthMarq

NorthMarq has secured $73.2 million in combined FHA debt to recapitalize a three-property portfolio in the nation’s heartland. The debt was secured on behalf of Monitor Finance.

The portfolio’s multifamily communities, representing a combined 721 total residences, are located in Omaha, Neb., and the Des Moines suburb of Norwalk, Ia. Common to each is encumbered FHA debt, making the properties eligible for HUD’s 223a7 refinance program. The program provided the sponsor a chance to lower its coupon rate, extend amortization and enhance property cash flow with reduced debt service obligations. The loan amount range extended from $16.5 million to $34.9 million. Each loan’s structure featured the customary 35-year term and amortization period.

These three transactions represent the completion of a larger eight-property portfolio’s closing. They follow the funding of $89 million secured by five properties for the sponsor at the end of last year.

“HUD remains extremely busy after posting a record year in production, with closing timelines extended across most regional HUD offices,” Brett Hood, managing director of NorthMarq’s Chicago office, told Multi-Housing News. “Because the subject portfolio consisted of all existing HUD deals, the sponsor was able to execute through a 223a7 program, saving substantial time. Each loan was recast for a 35-year term, which saved the borrower substantial interest payments. The original loans carried coupons around 4 percent, while the new loans closed in the low 2 percent range.”

Warehouse redux

A pair of the portfolio’s properties, Torrey Pines and Old Market Lofts, are located in Omaha. The former is 23 years old, and offers 264 one- and two-bedroom floorplans. Units feature balconies or patios, washers and dryers, and in select residences fireplaces. Among the notable amenities of Torrey Pines are two swimming pools.

Old Market Lofts was built in 1901 as a six-story produce warehouse in downtown Omaha. It was redeveloped in 2002 as a 265-unit apartment property featuring one- and two-bedroom residences and ground floor retail. Units feature balconies or patios, vaulted ceilings, exposed brick and beams and large walk-in closets. A rooftop patio caps the amenity list.

The third property is High Pointe in Norwalk, Iowa. Constructed in 2000, the 192-unit multifamily community features one-, two- and three-bedroom apartments. Above- standard ceiling heights, washer-dryers, microwave ovens and high-speed Internet access are offered. One of the leading amenities of the property is a fitness center.

Earlier in March, a NorthMarq report revealed investors continue to have an appetite for manufactured housing.