Walker & Dunlop Provides $278M Fannie Mae Credit Facility for 20 M-F Properties
- May 16, 2014
Walker & Dunlop has provided a $278 million Fannie Mae credit facility to Milestone Apartments REIT, which is using part of the proceeds to fund two multi-family acquisitions totaling $78.3 million.
Led by Andrew Tapley, the Walker & Dunlop team structured the financing with full-term interest only. The facility consists of a mix of fixed and variable rate notes with staggered maturities collateralized by 20 multi-family properties in Arizona, Florida, Georgia, Tennessee and Texas, according to a Walker & Dunlop news release.
The Bethesda, Md.-based commercial real estate financing company structured the original facility for Milestone, a REIT with corporate offices in New York and Dallas that trades on the Toronto Stock Exchange, in 2005 and added assets to it in 2008. It was due to mature on April 1, 2015.
Milestone officials noted in their own release that the new facility increases the REIT’s cash flow with additional capital of approximately $50 million. By staggering the maturity schedule, it extends the overall weighted maturity of the facility from 2015 to 2022.
“We are extremely pleased with the successful refinancing of this component of our senior debt,” Robert Landin, Milestone CEO, said in the REIT’s release. “The execution of this transaction is indicative of the continuing evolution and optimization of Milestone’s capital structure by management, reflecting our ongoing focus on enhancing unitholder value.”
In the Walker & Dunlop release, Landin noted the financing company’s ability to “move quickly to help improve our financial flexibility as we pursue our growth objectives.” He added that Milestone appreciated working “with a lender that understands our market opportunity and business strength.”
Walker & Dunlop said it took 44 days to close the loan from rate lock.
“We have worked on this portfolio for years and each time have taken steps to ensure that we structure a loan that meets Milestone’s strategic needs,” Howard Smith, COO at Walker & Dunlop, said in the financing company’s release.
Aided by proceeds raised in the Fannie Mae facility, Milestone’s portfolio is growing. The REIT announced this week that it had closed on the $28 million acquisition of Harbor Creek, a 316-unit, garden-style apartment community in the Canton submarket of Atlanta. Built in two phase in 2003 and 2007, the complex is approximately 98 percent occupied. Milestone said it is in the process of placing a seven-year, interest only fixed-term mortgage of approximately $15.7 million on the apartment community at an interest rate of 3.5 percent. The financing is expected to be finalized by May 30.
The REIT is also in the process of acquiring Legacy Heights, a 384-unit multi-family community in the Westminster submarket of Denver for $50.3 million. Built in 1998, it is approximately 96 percent occupied and is located near Interlocken Business Park, an office complex with many high-tech companies. While it has not yet closed on the transaction, Milestone said it is expecting to assume a fixed rate mortgage of approximately $34.5 million at an interest rate of 3.8 percent, with an interest only portion through Aug. 1, 2016, and the loan maturing in August 2022.
“Legacy Heights and Harbor Creek are high-quality properties with high-occupancy rates that fit well with our established portfolio of garden-style, multi-family apartment communities located in growing metropolitan markets through the southeast and southwest United States,” Landin said in a release announcing the pending acquisitions