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LUBBOCK, TX-A New York City investment group, with one multifamily deed in Lubbock, has bought another in the West Texas university town and soon will be closing on the third as the newly formed syndicate turns to the Lone Star State to start building the portfolio.

A $7.5-million Fannie Mae loan has backed the acquisition of the 350-unit Gatewood Apartments at 2701 44th St. The buyer also owns the 98-unit Stratford Place at 4091 4th St. and is poised to add the 162-unit Twin Oaks at 5817 22nd Place.

The 20-acre Gatewood was built in 1966 and expanded in 1981 to fully build out the land with 100 buildings in a park-like setting. The single-family atmosphere in a multifamily project keeps occupancy high with a roster of longtime tenants, says Andrew Gnazzo, asset vice president for Boston-based Berkshire Mortgage Finance. At sale time, Gatewood was 96% leased. The average unit measures 690 sf; average rent is $415 per month, according to Gnazzo. One unit is a privately owned condo.

Gnazzo says the syndicate is building a portfolio of high-cap rate properties in tertiary markets. Gatewood was bought at a mid-9% cap. “There will be cash flowing for these guys from Day One,” he says of a property without major deferred maintenance.

Berkshire’s Gnazzo tells GlobeSt.com that he packaged a Fannie Mae aggregate loan with a seven-year term, 30-year amortization and 5.38% interest rate. The loan-to-value ratio was 79.5%. “Basically,” he says, “it was a full-boat loan.”

The aggregate product, he explains, is a seldom-used line that worked well with the deal, but required some extra effort and changes in the condo documents to garner Fannie Mae approval. A couple units also are Section 8 HUD housing-supported. The Berkshire press release says the ability to close “proves that properties with the existence of broken condominium associations can be finance by Fannie Mae provided certain requirements are met.

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