Capital One, Others Provide $5.1B for Properties Sale

Capital One served as a co-lender and agent for an adjustable-rate Freddie Mac warehousing facility provided to Berkadia Commercial Mortgage.
Cambridge Village, one of the properties included

Cambridge Village, one of the properties included

Capital One served as a co-lender and the administrative and collateral agent for a $5.1 billion adjustable-rate Freddie Mac warehousing facility provided to Berkadia Commercial Mortgage, Capital One announced Friday. The credit facility is in connection with Lone Star Funds’ $7.6 billion acquisition of multifamily REIT Home Properties Inc.

When Lone Star, of Dallas, announced the acquisition in June, it reported that it had received $6.1 billion of fully committed financing from Goldman, Sachs & Co. The just-announced loan bridges the timing gap between the origination of 107 individual loans needed to fund the acquisition and the sale of these loans to Freddie Mac.

Home Properties’ 107 communities totaling 38,965 units are located in Illinois and in eight East Coast states from Maine to Virginia. The acquisition, Hugh Ward, co-head of real estate investments at Lone Star Funds, said in a prepared statement in June, “is consistent with our strategy of buying primarily Class B apartments, including workforce housing, located in in-fill markets with strong underlying fundamentals.”

TD Bank and Wells Fargo participated in the warehousing facility with Capital One.

“This transaction is a perfect illustration of Capital One’s capacity to lead and manage large, time-sensitive transactions,” Lein Tung, senior vp in Capital One’s Boston office, said in a prepared statement. Capital One declined to provide further information on the credit facility.

Berkadia announced in late October that it had secured $5.1 billion for the Home Properties portfolio, working with Lone Star Real Estate Fund IV to originate the seven-year loan through Berkadia’s Freddie Mac Program.

“This is the largest multifamily transaction Berkadia has executed with Freddie Mac to date,” managing director Anthony Cinquini of Berkadia’s Los Angeles office noted in a prepared statement at that time.

Berkadia CEO Justin Wheeler added that “In each of the past four years, Berkadia has closed a portfolio transaction in excess of $1.2 billion with Freddie Mac.”