Record $325M Refi Loan Completed for The Gateway

SAN FRANCISCO-Berkeley Point Capital LLC and Freddie Mac recently closed a $325 million refinance loan on The Gateway, a 1,254 unit multifamily property with over 62,000 sq. ft. of ground floor retail. 

The property was built between 1965 and 1967 on 7.74 acres in San Francisco's financial district.  The ten-year, full-term interest-only loan has a fixed rate of 3.38%, and is the largest single-asset loan in Berkeley Point Capital's history.  The loan was originated by Mitch Clarfield, senior managing director at Berkeley Point. 

Situated on three blocks at the edge of San Francisco CBD, the property is bordered by Jackson St., Drumm St., Battery St., and Washington St. and is a prime location with expansive city and Bay views, offering residents easy access to shopping, employment, and the Financial District, Ferry Building, and the notable Embarcadero. Retail tenants at the property include Safeway, Bank of America and Starbucks. 

Berkeley worked with the Sponsor over an extended period of time to identify execution options. Already familiar with the sponsor and the asset, Berkeley Point and Freddie Mac were positioned to rate-lock in 15 days following the sponsor's selection of the execution option that best met its objectives. The company says it was "no small task given the size of the loan, the complexity of the borrower structure, the age of the property, and the volatile interest rate environment."  Berkley Point also arranged for an extended rate lock at a small incremental cost to the borrower.  The extended rate lock removed rate and spread risk from the situation, while allowing for amortization of the yield maintenance premium, providing substantial savings to the borrower. 

The asset has been in Berkeley Point's and Freddie Mac's portfolios since 1997, and this transaction represents their fifth financing of the property for the sponsor.  Berkeley Point and Freddie Mac refinanced the asset in 1997 and then again in 2005.  Second mortgages were placed on the property in 2001 as well as in 2007. 

“Berkeley Point Capital and Freddie Mac had valuable knowledge about the asset and have a long-standing relationship with the asset's ownership group, giving us an edge in what was a very competitive process”, said Clarfield.  “We took a very proactive stance in hopes that we could provide our customer an opportunity to lock in a long term rate at what proved to be near historic lows.  We worked closely with Freddie Mac to put an outstanding offer on the table.  This is a one of a kind asset and we wanted it to remain in our portfolio for at least another 10 years.”