Bethesda, Md.—Real estate finance company Walker & Dunlop Inc. closed two Fannie Mae loans totaling $161 million with Cortland Partners. The loans will be used for the acquisition and conservative rehabilitation of Stoneridge Apartments in Ashburn, Va., and Century Northlake Apartments in Charlotte, N.C. Both are garden-style properties.
Both transactions were financed using Fannie Mae’s Structured Adjustable-Rate Mortgage (SARM). A SARM is a variable-interest-rate loan that delivers long-term financing with appealing floating rates and prepayment flexibility.
Cortland Partners intends to parlay capital improvements, unit renovations and rebranding into a strategic repositioning of the apartment communities.
By so doing, they will be able to take advantage of the rapid growth of the Ashburn and Charlotte markets and capture significant rent premiums. The SARM backed by Stoneridge is a seven-year, full-term interest-only loan. The SARM backed by Century Northlake is a 10-year loan with five-year interest-only period.
Stoneridge Apartments’ one-, two- and three-bedroom apartments offer private balconies and patios, oversized garden soaking tubs, upgraded GE appliances and gas fireplaces. The community’s amenities include a 7,000-square-foot clubhouse, fitness center with free weights and adjacent 70-acre nature preserve with playing fields.
Century Northlake Apartments’ one-, two- and three-bedroom apartments offer above-standard ceiling heights, dual-pane glass, fire sprinklers and full-size washer-dryer hook-ups. Amenities featured are a business center, clubhouse and fitness center.
Through the end of September, one third of Walker & Dunlop’s 2016 total lending through Fannie Mae and Freddie Mac has been floating rate. Experienced borrowers with a broad spectrum of investment objectives have opted to avail themselves of the attractive rates and flexible terms provided by this loan type.
“Cortland Partners is an experienced sponsor that has a unique investment horizon for each property in its portfolio,” said Managing Director Stephen Farnsworth, who led the New Orleans-based team. “Our team worked with Cortland to determine that Fannie Mae’s SARM was the most strategic execution for these properties, and we tailored the loan terms of each transaction to best align with the sponsor’s strategy.”
Jeffrey Ketron, Director, Multifamily Customer Engagement for Fannie Mae, observed that his team was pleased to work with Walker & Dunlop and Cortland Partners to finance this pair of rental properties. “Our SARM execution was the perfect fit because of how fast-moving these acquisitions needed to be,” he added.
“Thanks to our team’s review and quick delegation back to Walker & Dunlop, they were able to meet all of the timing and structure flexibility requested by the borrower.”