ORANGE COUNTY, CA—Michael T. Elmore, EVP/managing director NorthMarq Capital‘s Los Angeles-based regional office, has arranged the refinancing of three multifamily properties in Orange County for a combined total of $58.1 million. The borrower on all three transactions was Advanced Real Estate Services.
The three properties involved are Serena Vista, a 172-unit asset at 10300 Hacienda Ave. in Fountain Valley, which was refinanced at $27.3 million; Villa del Sur, a 112-unit property at 2701 W. McFadden Ave. in Santa Ana, which was refinanced at $12.6 million; and Cantabria Apartments, a 97-unit property located at 7835 Oleander Circle in Buena Park, which was refinanced at $13.8 million.
Serena Vista’s transaction was structured with a 10-year term and 30-year amortization schedule. Financing was provided by Fannie Mae on a cash-out 1.25 debt-coverage ratio. The loan paid off the existing loan and returned all of the equity from a 2009 purchase.
The Vista del Sur transaction was a Fannie Mae loan that had the same terms as Serena Vista. This was NorthMarq’s second financing of the asset, and it provided the borrower with nearly $5 million in excess cash-out for future multifamily acquisitions. “These were the fourth and fifth Fannie Mae loans in the past eight months for the borrower—excellent terms and flawless execution yet again,” says Ellmore regarding the Serena Vista and Villa del Sur transactions.
The Cantabria Apartments transaction was structured with a 30-year term with five years fixed followed by a 25-year floating-rate period. NorthMarq arranged financing for the borrower through its relationship with a national bank that was willing to implement an aggressive 1.15 debt-coverage ratio to accommodate a refinance of a 2007 vintage CDO loan that had been extended and was under forbearance. Elmore says, “The economics were outstanding with a 3.38% fixed five-year rate, the loan payoff and partial return of capital.”
The multifamily market in Orange County continues to be stable. As GlobeSt.com reported earlier this week, Trent Brooks, EVP of Bellwether Enterprise Real Estate Capital LLC told GlobeSt.com that the market has strong fundamentals. “Occupancy is strong, and rent growth—although somewhat modest—is evident. Not unlike other markets, rent growth here is tied to wages, which we know are pretty static. There’s the age-old law in Southern California of supply and demand. There’s never enough supply relative to the demand of quality rental housing.”