transactions are now being
financed on more favorable
terms than when the market
was concentrated in the hands
of fewer lenders as it
was several years ago.
CARLSBAD, CA-GlobeSt.com has exclusively learned that the local office of Meridian Capital Group LLC recently negotiated and closed nine loans totaling $35.4 million in permanent and bridge financing for 36 properties in three states.
Meridian’s Carlsbad office, managed by Seth Grossman, a managing director at the firm, arranged two 10-year, fixed-rate CMBS loans totaling $23 million, both with interest rates below 5%, to finance a newly stabilized 28-building, 620-unit multifamily portfolio located on the south side of Chicago. The cash-out closings occurred within days of each other.
Grossman also negotiated a $2.2 million, seven-year portfolio loan with a fixed interest rate of 4.35% for a landmarked, 80-unit multifamily property located on East 79th Street and a $1 million supplemental Fannie Mae loan for an 85-unit multifamily property located on North Austin Boulevard, both in Chicago, IL.
“Having previously closed several similar portfolios with the same lender, we were able to effectively manage the process and close these loans in the short timeframe required by the client,” says Grossman. “Additionally, in response to a tightening of CMBS spreads over the period from application to closing, we leveraged Meridian’s strong relationship with the lender, and we were able reduce the signed and accepted interest rate spread on the deal by 20 basis points creating significant savings for our client.”
Grossman tells GlobeSt.com that “The debt capital markets have continued to improve throughout 2012 as a result of additional lenders entering the space. This has led to a substantial increase in competition driving tighter pricing, faster closings and ever more creative underwriting solutions.” The end result of this, he says, is transactions are now being financed on more favorable terms than when the market was concentrated in the hands of fewer lenders as it was several years ago.
Also closed by Grossman was a $6 million, two-year, fixed-rate bridge loan for the 295-room Phoenix Airport Crown Plaza hotel, located in Phoenix, AZ. The property is on a long-term ground lease that was renegotiated prior to closing in order to allow for financing. Immediately following the owner changed flags to operate under the Coast Hotels and Resorts Franchise.
In Seal Beach, CA, Grossman arranged a $1.5-million loan for a five-unit, multifamily building, located on Fifth Street and a six-unit, mixed-use building, located on Main Street.
“The interest rate on both assets is in the mid-4% range and the portfolio lender won the transactions by offering very flexible prepayment terms, along with a 10-year term for the mixed-use property, and a 15-year term for the multifamily,” he says.
Grossman also negotiated five-year, fixed rate, non-recourse financing with an interest rate below 4% through a correspondent portfolio lender for a 56-unit multifamily property in Phoenix, AZ and two multifamily properties totaling 91-units in Tempe, AZ.