CBRE Arranges $112.8M Financing of Three-Property Texas M-F Portfolio
- Aug 24, 2012
CBRE Group Inc. has reeled in an approximately $112.8 million financing package on behalf of Abbey Residential L.L.C. The commercial real estate services firm’s Capital Markets Orlando group secured loans for Abbey Refinancing’s refinancing of three Texas apartment properties totaling 1,381 units.
The group of assets includes two Class A communities that Abbey Residential developed in 2009. Abbey on Lake Wyndemere, a 360-unit property, spans 25 acres in The Woodlands, just outside of Houston, and the 261-unit Abbey at Grande Oaks offers 261 residences on 10 acres in San Antonio. Rounding out the portfolio is Houston’s Abbey at Eldridge, a 760-unit community that Abbey Residential acquired in 2008. The multi-family real estate company completed an $11.5 million renovation program at Eldridge the following year.
Facilitated through Freddie Mac’s CME program, the financing came in the form of three fixed-rate mortgages at a loan-to-value ratio of 75 to 80 percent.
“The CME program worked wonderfully in this case,” Glenn D. Housman, a senior vice president with CBRE Capital Markets, told Commercial Property Executive. “On higher leverage loan requests such as these, it is a fantastic deal, particularly in the current [government-sponsored enterprise] lending paradigm.”
The loans, which were completed concurrently, feature fixed rates below 4 percent fixed rates on 10-year terms and 30-year amortization schedules. “Although there were other viable loan options for these deals such as [Fannie Mae], when all of the requested loan parameters were considered, Freddie Mac was more willing to deliver those that were most important to our client, and therefore, Freddie Mac won the business,” he added.
While the capital markets in general have certainly warmed up to the thriving multi-family sector, the GSEs are the most active of the bunch; however, neither Freddie Mac nor Fannie Mae is handing out loans with abandon. It takes more than a bustling, high-demand location to attract good financing deals.
“For most lenders today and particularly the GSEs, sponsorship and property quality are given a very high degree of consideration,” said Housman. “I have found Freddie Mac in particular to always be highly sensitive to Borrower relationships and overall perceived sponsor quality/financial strength. They really focus on the experience of the sponsorship, the specific markets where the sponsors operate, and the borrowing history and credit.”
Abbey Residential and its assets fit the bill.