PHILADELPHIA-Locally based GPX Realty Partners has obtained slightly more than $17.2 million in floating-rate interim refinancing for the five-property, 309-unit multifamily portfolio it acquired for $20.4 million on June 27 from a company headed by Bob Stillwell. Horsham-based Capmark Finance Inc. provided the new funding.
Warren Higgins, SVP in Capmark's Horsham office, originated the transaction. It is for a three-year term with interest-only payments. Higgins tells GlobeSt.com the rate is between 150 and 200 over Libor and that it has two one-year extension options.
"The previous owner used GPX's payment on the portfolio to repay debt on the property," he says. As GlobeSt.com reported, GPX plans to invest $3.6 million in upgrades to the portfolio. As the new owner renovates, Higgins says, "some improvements along with rent increases may require occupancy to dip, causing a temporary reduction in cash flow, so the funding also includes an interest reserve, if needed." An interest reserve is a special account funded by the loan to cover interim interest payments.
The GPX business plan is flexible, Higgins adds. It would allow the owner to take equity out, once the renovations are complete and property income is up, either by selling or refinancing.
The portfolio includes Robert Bruce West, Livingstone Apartments and Oak Tree Apartments in Hatboro; Valley Brook Apartments in Ambler, and Concord Court Apartments in Aston. They have an aggregate of 20 buildings. The complexes were built between 1968 and 1970, and were 91% rented at the close of GPX's acquisition.
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