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FORT LEE, NJ-Locally based Deerwood Real Estate Capital recently arranged $4.3 million in financing for a multifamily property in Englewood. The newly renovated 40-unit garden style apartment complex is subsidized through HUD’s Housing Assistance Payment program.

Deerwood Managing Partner Abe Katz secured financing through a local savings bank featuring a five-year fixed-rate term with a five-year extension option. The loan is non-recourse, has 30-year amortization and a flexible prepayment penalty. According to Katz, the property was not distressed.

Katz and Deerwood broker Meyer Perlman were also involved in the sale of a $36.5 million non-performing mortgage note. The mortgage is secured by land in New York City. Katz could not reveal much about the deal in accordance with a request by the purchaser.

In addition, Katz negotiated a third loan in the amount of $2.3 million for the purchase of a four-story, 5,000-square-foot mixed-use property located on 8th Avenue in New York City. The property, which was delivered to the buyer vacant, will be renovated and then leased.

The loan featured a five-year term and is non-recourse, with a 6.25% interest rate for the length of the term. According to Katz, the first and second floors will be retail, while the upper floors will consist of two apartments. He was unable to release the borrower or the lender.

“While the commercial real estate financing markets remain challenging, we have found ways to close deals by creating unique structures which accommodate both the lender and the borrower at the same time,” Katz tells GlobeSt.com. “As mortgage brokers, you need to find ways to think out of the box and create new structures so that you can add value to your clients, which is something we’ve been able to do.” He adds, “six or 12 months ago, it felt like there was very little activity, but we now find that there is much more movement.”

According to Katz, there are many creative strategies for closing deals. “Lenders are certainly more cautious about how they look at underwriting criteria, whether it’s lease rollover or general market vacancy or what they see as rent growth over the term.” Katz believes that borrowers are more understanding about structuring the deal so that the lender is comfortable, especially when it’s on a non-recourse basis.

“The lender needs to feel secure that the borrower is prepared to put aside capital to maintain and lease up the property,” Katz explains. “In the past, lenders were more liberal about those sorts of things and borrowers were less willing to give up that type of structure.”

In general, Katz notes that getting a deal done today requires more work. “In the past, you had multiple lenders competing on every single deal, but in today’s environment it takes double or triple the amount of work to find a lender who understands the market [that] a particular property is in and understands the borrower’s objectives.” He continues, “We find that our job today as intermediaries is to find the right fit for both the lender and the borrower. It is one thing to get an application, but it’s another to get a deal closed.”

In addition to deals Katz worked on, Deerwood managing partner David Rosenberg arranged a loan on a 61,111-square-foot office/industrial building located in Monsey, NY. The $4.3 million loan refinanced an existing CMBS loan and features a five-year term with 30-year amortization.

“We are definitely seeing things start to thaw a bit,” Rosenberg relates. “Lenders are still on the conservative side, but people seem to want to put money out again. The fact that loans are actually starting to trade now is pretty exciting.”

Rosenberg has been working on a variety of loan sales for the past few years, “most of which were stalled along the way or some never got consummated because the bid/ask was too wide,” he admits. “The fact that things are now starting to clear is a very good sign.”

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