ODESSA, TX—Even with high cap/occupancy rates and below-replacement cost, still doubts remained on funding for a multifamily property built in 2014. However, for entrepreneurial and less risk-averse lenders, opportunistic visions have potential.
In the end, Berkadia secured a $25.125 million loan for the acquisition of the Faudree Ranch Apartments, which were 90% occupied at the time of sale. Berkadia South Florida senior managing director Charles Foschini and managing director Christopher Apone arranged the loan on behalf of the borrower, Faudree Ranch Apartments LLC.
“The recent energy sector bust scared off many lenders, but the economic situation over the past six months has improved, drawing some lenders, the less risk-averse and entrepreneurial ones, back into the fold,” Foschini tells GlobeSt.com. “We believe there is tremendous opportunity in the Texas multifamily arena for those that can find a lender.”
JP Morgan originated the five-year fixed-rate loan at a competitive interest rate, two years of interest and a 67% loan-to-value ratio.
“The borrower is a long-time client with 1031 capital making a well-timed acquisition in the heart of America's energy corridor,” said Foschini. “Though the purchase was well below replacement cost and at a very high cap rate, there were not many lenders who shared the same opportunistic vision. We were successful in generating a competitive market for the loan and found a CMBS lender who performed flawlessly and delivered the loan exactly according to our application terms.”
The acquisition property is a 300-unit apartment complex with several three-story buildings of one-, two- and three-bedroom units. Rents range from $1,220 to $2,200 per month. Located near West Highway 80 East, the community is close to the Odessa Country Club, Odessa-Schlemeyer Field airport, Ratliff Stadium and The University of Texas of the Permian Basin.
The property features unit amenities such as built-in computer desks, six-panel interior doors and 9-foot ceilings, as well as community amenities that include a bocce ball court, business center and covered parking.
ODESSA, TX—Even with high cap/occupancy rates and below-replacement cost, still doubts remained on funding for a multifamily property built in 2014. However, for entrepreneurial and less risk-averse lenders, opportunistic visions have potential.
In the end, Berkadia secured a $25.125 million loan for the acquisition of the Faudree Ranch Apartments, which were 90% occupied at the time of sale. Berkadia South Florida senior managing director Charles Foschini and managing director Christopher Apone arranged the loan on behalf of the borrower, Faudree Ranch Apartments LLC.
“The recent energy sector bust scared off many lenders, but the economic situation over the past six months has improved, drawing some lenders, the less risk-averse and entrepreneurial ones, back into the fold,” Foschini tells GlobeSt.com. “We believe there is tremendous opportunity in the Texas multifamily arena for those that can find a lender.”
“The borrower is a long-time client with 1031 capital making a well-timed acquisition in the heart of America's energy corridor,” said Foschini. “Though the purchase was well below replacement cost and at a very high cap rate, there were not many lenders who shared the same opportunistic vision. We were successful in generating a competitive market for the loan and found a CMBS lender who performed flawlessly and delivered the loan exactly according to our application terms.”
The acquisition property is a 300-unit apartment complex with several three-story buildings of one-, two- and three-bedroom units. Rents range from $1,220 to $2,200 per month. Located near West Highway 80 East, the community is close to the Odessa Country Club, Odessa-Schlemeyer Field airport, Ratliff Stadium and The University of Texas of the Permian Basin.
The property features unit amenities such as built-in computer desks, six-panel interior doors and 9-foot ceilings, as well as community amenities that include a bocce ball court, business center and covered parking.
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