A $7.5-million Fannie Mae loan has backed the acquisition of the 350-unit Gatewood Apartments at 2701 44th St. The buyer also owns the 98-unit Stratford Place at 4091 4th St. and is poised to add the 162-unit Twin Oaks at 5817 22nd Place.
The 20-acre Gatewood was built in 1966 and expanded in 1981 to fully build out the land with 100 buildings in a park-like setting. The single-family atmosphere in a multifamily project keeps occupancy high with a roster of longtime tenants, says Andrew Gnazzo, asset vice president for Boston-based Berkshire Mortgage Finance. At sale time, Gatewood was 96% leased. The average unit measures 690 sf; average rent is $415 per month, according to Gnazzo. One unit is a privately owned condo.
Gnazzo says the syndicate is building a portfolio of high-cap rate properties in tertiary markets. Gatewood was bought at a mid-9% cap. "There will be cash flowing for these guys from Day One," he says of a property without major deferred maintenance.
Berkshire's Gnazzo tells GlobeSt.com that he packaged a Fannie Mae aggregate loan with a seven-year term, 30-year amortization and 5.38% interest rate. The loan-to-value ratio was 79.5%. "Basically," he says, "it was a full-boat loan."
The aggregate product, he explains, is a seldom-used line that worked well with the deal, but required some extra effort and changes in the condo documents to garner Fannie Mae approval. A couple units also are Section 8 HUD housing-supported. The Berkshire press release says the ability to close "proves that properties with the existence of broken condominium associations can be finance by Fannie Mae provided certain requirements are met.
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