ATLANTA-The 368-unit MetroPointe Lofts student housing project has received $75.8 million in financing from Philadelphia-based Capmark Finance Inc.

The financing, issued to Technology Housing LLC, was used to repay a construction and mezzanine loan. The loan will have a fixed interest rate for the first year. In subsequent years, the interest rate will be adjustable.

Capmark Finance senior vice president and branch manager John Beam Jr., of the Atlanta mortgage banking office, arranged the transaction. Beam tells GlobeSt.com that the interest rate for the loan will be a floating rate over LIBOR. The loan was a short-term bridge loan with a three-year term with two, one-year extensions. "This financing will allow the property to stabilize over the next school year and thereafter the borrower will have the flexibility to refinance long term or sell the property," Beam says.

MetroPointe Lofts is located at 800 W. Marietta St. The property consists of one building that has four interconnected sections. The building is situated on a 9.35-acre site approximately six blocks west of the Georgia Tech campus, about two miles northwest of the Georgia State University campus and two miles north of the Atlanta University Center campus. Amenities include a clubroom, fitness center, pool, computer lab, game room, study room, sand volleyball court and a basketball court. A multi-level parking deck is located on site. The building opened in early August 2005.

One of the challenges of the loan was the building's relatively low occupancy level. To meet this challenge, Capmark structured the loan to include a debt-service reserve for projected debt service shortfalls until the project stabilizes. The loan also includes debt service performance criteria, which will determine the interest rate after the first year of the loan.

"The sponsor (Technology Housing LLC) is a venture between Collegiate Holdings and Kim King Associates," Beam says. "Both partners have extensive area real estate development experience and Capmark has a long, successful relationship with financing Kim King projects. The project was delivered below the construction cost budget in September 2005 and, as a long-term investment, is far below today's replacement cost. However, the late delivery encumbered pre-leasing in the critical fall quarter last year."