more of these structures
come to market as borrowers
realize how valuable they can be.
BETHESDA, MD-Berkeley Point Capital recently closed a $58.8 million credit facility addition on an existing $80 million facility. The facility is a rare execution of a GSE structured facility, in this case Fannie Mae. Namely, it is a non resource, cross collateralized pool financing with the ability to add, remove and substitute assets, Berkeley Point’s senior managing director, Mitch Clarfield, who led the transaction to expand the facility, tells GlobeSt.com. The big plus to this type of structure, he notes, is that the financing is not what one would get on a single asset execution unless there was a very low leverage.
The sponsor of the deal was Simpson Housing Fund I, LLC, a joint venture between Simpson Housing LLLP and a major East Coast pension fund. The approximately nine year, 2.92 % fixed rate advance funded the acquisition of the 300-unit Metro at Greenway in Houston, TX, and the refinancing of the 114-unit Zoso Flats located in Arlington, VA. The original 10-year credit facility transaction is secured by the three other multifamily properties that the fund currently owns. The facility now encumbers five of the fund’s assets and is coterminous with the original advance. The credit facility has a current outstanding balance of $138.8 million and allows the sponsor to request future advances with either a fixed or variable rate, as well as the ability to add, release and substitute collateral assets. “The flexibility of the facility allows them to retain the benefit of this extremely low rate, long term financing, even if they decide to replace some or all of the assets in the collateral pool, says Clarfield.
Clarfield adds that he believes more of these deals will come to market as borrowers become aware of their utility. In the last four to five years, he says, he has brought five or six facilities to market.