Suburban Multifamily Asset Earns $4M Bridge Loan

GARLAND, TX-A San Antonio limited partnership has obtained a $3.7-million loan to retire acquisition debt and refund rehab capital for 117 units in the Pecan Point Townhomes development in Garland.

Hunter McGrath of Dallas-based Quantum First Capital, the loan originator and closer, tells GlobeSt.com that the bridge-to-permanent financing shaves about $130,000 from the annual payment when matched up to a standard loan with a 7% interest rate. “That’s why they did it,” he says of the three-year bridge, with a floating rate at a 4.5% start.

The Chicago-based LaSalle Bank Corp.’s Dallas office provided the capital and a commitment that the loan can roll to permanent at any time. “The loan structure vaults the current yield to the borrower into the mid to high teens while allowing the borrower to fix when the crystal ball states that rates are going to escalate,” McGrath said in a press release.

The borrower acquired 117 of 141 units of the two-bedroom development at 1938 Cranford Dr. about 3.5 years ago after assembling deeds from seven owners, McGrath says. An immediate makeover, funded from the partnership’s pocket, repositioned the holding to 91% occupancy and cured deferred maintenance for the return to the lending community for the new capital infusion. Units average 1,040 sf and rent for 67 cents per sf.