John Reed

WASHINGTON, DC-Southern Management Corp., the largest privately owned residential property management company in the Mid-Atlantic region, recently refinanced a $1.5 billion portfolio with Freddie Mac. The 69 properties in the portfolio are located in Maryland and Virginia. SVP John Reed of Berkadia Commercial Mortgage facilitated the transaction.

This transaction, he tells, is also expected to be Freddie Mac’s largest multifamily deal eligible for securitization to-date through its Capital Markets Execution program. The original transaction had been backed from Freddie Mac’s loan portfolio. For that reason, the refinance was tricky, Reed says. “Freddie Mac’s underwriting and due diligence requirements for securitization are a lot more involved than its underwriting and due diligence for portfolio financing.” Also, he adds, “doing anything 69 times is not especially easy.”

David H. Hillman, chairman and CEO of Southern Management, served as the sponsor on the transaction. Also participating in the transaction were Pauline Crytzer, vice president at Berkadia, Rachel Levy, director of Credit & Underwriting for Freddie Mac’s Southeast Region and Chris Davis, Sr. Producer of Freddie Mac’s Southeast Region.

The portfolio is made up of individual loans ranging from $2.5 million to $135 million. The properties are a mix of garden, mid-rise and high-rise buildings ranging from 53 to 1,402 units, containing over 23,000 total apartment units and more than 250,000 square feet of office and retail space.

The newest property in the portfolio is Palisades of Towson in Towson, MD, an 18-story LEED Silver certified property developed in 2010. The oldest is Kent Village Apartments in Landover, MD, which was originally developed in 1949. It is 96% occupied.