Freddie Mac Green Advantage Provides Energy Enticement
The Green Advantage program was used for Eagle Property Capital’s acquisition of three multifamily communities in Houston’s outer loop slated for half a million dollars in water conservation and energy upgrades.
HOUSTON—Green financing was arranged for Miami-based Eagle Property Capital’s acquisition of three multifamily communities in Houston’s outer loop. The properties are Landmark at Barker Cypress (312 units), Champions Centre Apartments (192 units) and Champions Park Apartments (246 units). Eagle Property Capital will invest half a million dollars in water conservation and energy-efficient upgrades to the interiors and common areas of all three properties.
Senior managing director Mitch Sinberg, senior director Brad Williamson and associate director Matthew Robbins of Berkadia’s South Florida office arranged the financing. Freddie Mac’s “Green Advantage” program was utilized, which provides better pricing for reduction in water/energy consumption.
“With a continuously growing economy supported by updated infrastructure and a well-educated workforce, Houston’s multifamily market has seen tremendous growth with rising rents for the last year and a half,” said Sinberg. “The sponsor recognized this positive trend and capitalized on a strategic portfolio near major employment hubs including the Medical Cluster, the Energy Corridor and Memorial City.”
The firm is a repeat client of Berkadia, which has provided more than $238 million of financing for Eagle Property Capital through 14 different transactions totaling nearly 4,000 units throughout Texas and Florida since 2015.
“Dallas and Houston have become favored investment markets for many of our clients, and thanks to the stabilization of the oil sector, many lenders are also viewing Houston more favorably and becoming more aggressive than they were just a few years ago,” Williamson tells GlobeSt.com.
All three loans were lower leverage fixed rate, with 10-year terms and five years interest only.
“EPC is one of the top multifamily firms that targets Hispanic-based communities, whose mission is not only to enhance the overall quality of life for its tenants, but also to improve the properties by recapitalizing them,” said Williamson. “EPC has been extremely active acquiring over $463 million of real estate and is currently on their fourth fund. We look forward to continue advising their firm and building our excellent relationship with them.”
EPC believes in the strong fundamentals of the Houston market which fits with its investment strategy and target demographic, said Rodrigo Conesa, co-founder and managing principal of EPC.
“Landmark at Barker Cypress, Champions Park and Champions Centre are quality assets with significant value-enhancement opportunities in highly desirable locations in Houston that represent a great addition to our portfolio,” added Gerardo Mahuad, co-founder and managing principal of EPC.
Berkadia also secured financing for the following properties in Eagle Property Capital’s portfolio: Huntington Apartments in Houston; Valley Oaks in Hurst, TX; Arlington Hills and Montecito Club in Arlington, TX; and Glen Arbor, Westgate, Sedona Park, Villas de Estancia, Colinas Ranch, Woodchase and Clarendon in Irving, TX.
Eagle Property Capital is a real estate investment manager engaged in the ownership, acquisition, management and disposition of value-add multifamily apartment properties targeting predominantly, but not exclusively Hispanic communities in the Southern United States, on behalf of institutional and private investors.
Houston’s multifamily market is set for supply and demand parity in 2019, according to Berkadia’s 2019 Houston multifamily market preview. Following a slowdown in absorption deriving partially from a return of homeowners to residences after Hurricane Harvey, multifamily developers will taper deliveries to bring supply and demand closer to equilibrium.
“2019 should actually be very favorable towards the landlord,” said Ryan Epstein, senior managing director of Berkadia’s Houston office. “We’re not going to have a lot of supply, so it’s a good year for landlords to solidify occupancies and work on increasing rents. The trend of capital chasing assets will continue into 2019, and Houston has displayed exceptional fundamentals that will keep the multifamily market attractive for a variety of large institutional investors.”
Rising interest rates will present some headwinds in 2019, according to senior managing director Tucker Knight of Berkadia’s Houston office.