CREF Advisors Expands Baltimore Footprint

BALTIMORE-CREF Advisors, a Boca Raton, FL-based commercial mortgage brokerage company that specializes in multifamily, has always had a presence in the Mid-Atlantic, including the city of Baltimore. Lately, though, president Seth Grossman tells GlobeSt.com, the company has seen activity pick up significant in the area. 

“I would say this is now an emerging market for the company. The volume of apartments alone in Baltimore has ramped up significantly over the past year and a half.” In addition, he adds, cap rates have gone significantly down.

In the past month, the firm has closed two deals totaling $60 million here. One transaction was a 408 unit multifamily property in Laurel, MD, called Country Meadows Apartments. The complex was built in two stages in the late 1970s and early 1980s by the borrower's family. The property was financed as a self liquidating 33-year loan carrying a fixed interest rate of 3.83% for the entire 33-year term. With historically low interest rates, the borrower decided he wanted to eliminate any future interest rate risk, Grossman explained and asked the firm to secure self-liquidating loan with the longest term possible.  CREF secured a $32.4 million loan with a structured step-down prepayment that includes no prepayment penalty in the last 23 years of the loan.

Another transaction was for a pool of four triple net lease Walgreens properties. The Baltimore-based borrower knew he would have to place 1031 money upon completion of a partnership buyout and spent months trying to locate Walgreens stores that were just coming out of construction, Grossman says. “He found three properties with 24.5 years left on the initial lease term and a fourth with 22 years left.”

The properties, located in Buffalo, MN, Peekskill, NY, River Ridge LA, and Spring Hill, TN, were purchased at an average cap rate of 6.65%. CREF secured self liquidating non-recourse loans averaging 5.24% with no origination fee to the borrower, who received 90% LTC on the purchases.