Big Ticket M-F Financing Deals Continue to Flow as Camden Closes $420M Loan

Despite real estate market turmoil, sizeable multi-family financing deals continue to roll in, and Camden Property Trust has just joined the ranks of apartment property companies that are benefiting from government-controlled mortgage giants Fannie Mae and Freddie Mac’s ongoing willingness to dole out money. Houston-based Camden just closed a $420 million secured credit facility with Fannie Mae DUS lender Red Mortgage Capital Inc. The financing came in the form of a 10-year facility carrying an annual 5.12 percent fixed interest rate, with interest only payments. Camden put up 11 of its apartment properties as collateral for the loan, which matures May 1, 2019. With proceeds from the credit facility in hand, the multi-family real estate concern will pay down outstanding debt under its current revolving line of credit, retire existing debt–Camden previously retired $46 million of secured mortgage debt–and fund general corporate needs. The apartment market closed out 2008 in relatively good shape among commercial property sectors, with an average vacancy rate of 6.6 percent, according to a report by Marcus & Millichap Real Estate Investment Services–but with continued job losses cutting into renter household formation and the existence of a rather prevalent shadow market, the vacancy rate is expected to increase in 2009. Still, certain lenders appear to be undeterred by the less-than-sterling forecast. Last week, Alexandria, Va.-headquartered apartment complex developer AvalonBay Communities Inc. secured 14 mortgage loans totaling $741.1 million through Deutsche Bank Berkshire Mortgage Inc., which acted on behalf of Freddie Mac. And in March, Birmingham, Ala.-based Colonial Properties Trust closed a $350 million credit facility–secured by 19 apartment properties–that was originated by PNC ARCS L.L.C. for repurchase by Fannie Mae. Funding may be more accessible for those in the apartment game than for companies involved in other commercial real estate sectors, but as the aforementioned vacancy numbers indicate, multi-family has hardly escaped the downward spiral of the economy. To that end, Camden has been actively addressing the various resulting issues. In January, the company revealed it had reduced the pipeline of projects it will embark on in 2009, as well as its construction and development staff. Camden presently owns interests in and operates 181 apartment properties accounting for an aggregate 62,903 residences across the country, and has five projects under development.