TODAY’S DEALS: Hunt Mortgage Supplies $44.4M Full-Term, Interest-Only Loan

Hunt Mortgage Group provides a $44.4 million Freddie Mac loan to facilitate the acquisition and upgrade of a multifamily property; and Walker & Dunlop structures a $54.8 million Fannie Mae loan.

Park at Research ForestNew York—Hunt Mortgage Group provided a $44.4 million Freddie Mac loan to facilitate the acquisition and upgrading of a multifamily property located in The Woodlands, Texas. The seven-year loan includes full-term interest-only payments.

The Park at Research Forest is a 396-unit apartment complex located at 8900 Research Park Drive in The Woodlands, a master-planned community in the northern suburbs of Houston. “The Woodlands is a growing market and has exhibited an increasing demand for high quality multifamily housing,” commented James Kelly, vice president of Hunt Mortgage Group.

The Woodlands area has attracted major corporations and is home to several corporate campuses, most notably Chevron Phillips, Anadarko Petroleum Corporation, Huntsman, Woodforest National Bank, Baker Hughes, CB&I, McKesson Corporation, Hewitt Associates, Maersk Line and Safmarine.  Additionally, Exxon Mobile is relocating their headquarters to The Woodlands, a move that will bring 14,000-15,000 new jobs to the area.

Built in 2001, The Park at Research Forest is comprised of seventeen, three-story residential apartment buildings plus a two-story leasing office.  Property amenities include a clubhouse with 2nd floor kitchen and game room, several lounges, a business center, fitness center and Wi-Fi. A resort-style outdoor pool is adjacent to the clubhouse building, with poolside barbeque grills.

The seller invested more than $2.5 million in upgrades to 263 apartments over the past two years and achieved substantial rent increases for those units. Based on this success, the loan structure is designed to allow Southstar to complete the upgrades of all remaining units.

The transaction involved a 1031 Exchange and a borrower structure that included three tenants-in-common that were arranged by Southstar Capital Group.  Southstar is a long-time Freddie Mac and Hunt borrower that has an excellent track record in the Houston market.

Walker & Dunlop structures $54.8M Fannie Mae loan

Bethesda, Md.–Walker & Dunlop Inc. announced that it structured a $54.8 million Fannie Mae acquisition loan for Highland Gardens Apartments in Mountain View, Calif. The seven-year loan was structured as full-term interest only with a 65 percent loan-to-value ratio and a 1.25x DSC ratio.

Highland Gardens Apartments is a 187-unit garden-style apartment community built in 1963 and recently renovated in 2013. The updated luxury apartments include new appliances, private patios and granite countertops. Community amenities include a new fitness center, swimming pool, bocce ball court, and a brand new BBQ cabana. Previously, the asset was operated as two separate properties that are split down the middle by a parcel of land owned by the San Francisco Public Utility Commission (SFPUC). This parcel includes underground water mains that provide water to the nearby San Francisco Bay area.

Bryan Frazier, managing director, led the Walker & Dunlop team that structured the loan. Frazier stated that the strategy and size of this acquisition is a testament to both the high operating performance levels of the Silicon Valley area and the focus of experienced, yield-seeking real estate investors on creating value by renovating older, existing assets and improving operations.

Walker & Dunlop was able to work with the borrower and Fannie Mae to gain a comfort level with the SFPUC parcel in the middle of the property and meet an expedited rate lock and closing timeframe.

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