SAN DIEGO-The owner of a nine-property portfolio of Southern California apartment complexes has refinanced the properties with nearly $54 million in loans at an average of 70% LTV and a 4.83% rate for 30 years, amortizing over the full term, according to Marcus & Millichap Capital Corp. Chad O’Connor, a capital markets vice president in the San Diego office of MMCC who arranged the refinancing with a commercial bank, tells me that the bank is a new player in multifamily finance and was one of a number of lenders competing for the deal.

“The portfolio was originally under application with a large commercial bank that took too long to process the application,” O’Connor told me. “Rates went up and the client was not happy.” The bank that ultimately financed the deal bettered the existing lender’s rate, LTV and cost, noted O’Connor. “The borrower was pleased that we were able to secure much higher proceeds with cash out, as well as a lower interest rate and lower costs while closing within his timeframe.”

According to O’Connor, the financing reflects a change in the market. “We sourced the lender and completed the transaction in approximately 45 days, which was half the time our competition was quoting. Several of the appraisals came in lower than expected, but the lender was able to increase their LTV requirements to meet the client’s loan request, something the competition would rarely do.”

That represents a change from what lenders have been doing for the past few years, O’Connor observes, explaining that lenders have been extremely conservative, trimming LTVs and not budging if appraisals came in a bit short of where they were anticipated. “We are seeing a number of new commercial banks in the market competing aggressively for strong borrowers with well-located assets,” he said. In this refinancing, he noted, the average LTV of 70% includes some loans that were at 72% or 73% and others that were a bit under 70%.

The properties and individual loan amounts are: Smilax Road, San Marcos, $13.4 million; Vermont, Escondido, $11.928 million; Tavern, Alpine, $11.361 million; Durain Street, Vista, $4.193 million; D Street, Chula Vista, $3.99 million; Orange Avenue, San Diego, $2.8 million; Chatsworth, San Diego, $2.25 million; Glover Avenue, Chula Vista, $2.01 million; and Niagara, San Diego, $2 million.