Financing Keeps Rolling in for Colonial

Despite the fact that widespread job losses have begun to take a toll on the multi-family market, owners of this asset type are still able to secure financing in what remains a frigid lending environment. Just three months after having wrapped up a $350 million secured credit facility, Colonial Properties Trust has landed another major financing deal with the closing of a new $156.4 million secured credit facility.Colonial’s latest credit facility, consisting of a $145.3 million tranche and an $11.1 million tranche, carries a 10-year term and features a 5.31 percent weighted average fixed interest rate. The REIT relied on seven multi-family communities as collateral for the larger tranche, and a single multi-family property for the smaller one. Colonial, which owns or manages 36,336 apartment units, 16.5 million square feet of office space and 8.8 million square feet of retail shopping space in key Sunbelt states, plans to use the proceeds from the credit facility to trim down the outstanding balance under its $675 million unsecured line of credit to $183 million. Grandbridge Real Estate Capital L.L.C. originated the financing for repurchase by Fannie Mae, which also signed on to repurchase the $350 million secured credit facility that was originated by PNC ARCS L.L.C. for Colonial in early March. Both Fannie Mae and Freddie Mac, despite their recent financial hiccups, continue to invest in multi-family, facilitating loan after loan. In April, Fannie Mae, apartment REIT Camden Property Trust closed a $420 million secured credit facility with Fannie Mae DUS lender Red Mortgage Capital Inc., and apartment REIT AvalonBay Communities Inc. secured 14 mortgage loans totaling $741.1 million through Deutsche Bank Berkshire Mortgage Inc., which acted on behalf of Freddie Mac. Although job market contraction is wounding the apartment market, the value of multi-family REITs–indeed, REITs in general–is on the rise. As reported by CPN on June 1, a recent analysis by Jones Lang LaSalle Inc. found that REIT market values increased 60 percent since the end of February after a six-month period that brought values down 80 percent.