1,082-Unit Multifamily Portfolio Reaps $34M Refi

"It gives them the ability to sell," says Jay Wagley, managing director in Dallas for LJ Melody & Co., which financed the package as a seller-servicer for Freddie Mac. "They got a very, very attractive interest rate." He and Chris Wong, a vice president with the lender, closed the loan in 45 days for the Dallas borrower.

The refinanced portfolio consists of the 474-unit Oaks of Collin Creek Apartments at 700 W. Plano Parkway in Plano; 264-unit Woodlands Apartments at 2800 Lynnwood Dr. and 264-unit Walnut Ridge Apartments at 2500 Burney Rd., both in Arlington; and 80-unit Fairway Greens Apartments at 11011 Woodmeadow Parkway in Dallas. The properties were developed between 1965 and 1987 and rehabbed in the mid-1990s by Bradford Putnam, which bought the holdings in the late 1980s and early 1990s from the Resolution Trust Corp.

Wagley tells GlobeSt.com that the LJ Melody-financed deal has a 10-year term at a fixed-rate interest in the low 5% and one year at a floating rate. "They hit the low point of where the Treasuries were in December," Wong adds. "These Freddie Mac loans that we put on them gives them tremendous flexibility if they decide to hold or sell."

Wagley says Bradford Putnam retired loans from several conduit and life insurance company lenders, taking pre-payment penalty hits to eliminate higher interest rates. According to Wong, the other loans had interest rates ranging from 7.5% to 8.5%.

Wagley says there's more upward pressure than downward pressure on rates and Bradford Putnam was taking advantage of market conditions. "A lot of borrowers out there are testing what they can do," he says.

Bradford Putnam owns three other multifamily properties in Dallas/Fort Worth. One is up for sale. Industry sources say the firm hasn't bought any multifamily properties in more than a decade so it's highly possible a disposition play could be in the works.