4A — August 9 - 22, 2019 — Multifamily Financing — M id A tlantic
Real Estate Journal
Multifamily Financing By R. Brenner Green, Real Property Capital, Inc. Multifamily lending market
I nterest Rate Volatility in Multifamily Creates an Opportunity for a Shame-
are generally reserved for larger loans on properties in trophy-type locations at lower leverage. To be sure, if max loan proceeds are the goal, CMBS will again win most of the time. So in the span of half a year, the multifamily lending mar- ket did a complete back flip. It’s a reminder what a volatile financial world in which we all operate. It will be interesting to see if the rumor of a single rate cut for 2019 sends us back toward where we were a year ago, which if it happens will probably happen quickly.
So be sure you are talking to someone who is in the market every day as what might have been the best deal a week or two ago may not be the best deal next week. Your banker definitely isn’t going to tell you… R. Brenner Green is a 20- year veteran in commer- cial real estate finance and president of Real Property Capital, Inc., a full-ser- vice commercial mortgage banking firm based in the Philadelphia suburbs. Marcus &Millichap announces QOZ multifamily asset in Virginia sells for $28 million RICHMOND, VA — Mar- cus &Millichap announced the sale of Vida East Apart- ments, a 178-unit apartment complex in the Shockoe Bot- tom neighborhood of Rich- mond, Virginia. The property sold for $28 million, which equates to $157,303 per unit. “Vida East is a newly con- structed multifamily asset in a Qualified Opportunity Zone that was sold subject to assumed Virginia Hous- ing Development Author- ity (VHDA) taxable bond fi- nancing,” said Christopher Chadwick , first vice presi- dent investments in Marcus & Millichap’s Washington, D.C. office. “The high level of interest we generated during the 45-day marketing period underscores the appeal of Qualified Opportunity Zone investments.” Chadwick and Martin Mooradian , associ- ate, represented the seller, an out-of-state developer, and procured the buyer, a local developer. Bryn Merrey , senior vice president and di- vision manager is Marcus & Millichap’s broker of record in Virginia. Completed in August 2018, Vida East Apartments spans an entire block near the James River, Franklin Street and some of Richmond’s most vibrant restaurants and nightlife. Virginia Com- monwealth University, J. Sargeant Reynolds Commu- nity College and the Univer- sity of Richmond are nearby. Community amenities in- clude a rooftop picnic area, a saltwater pool and a dog park.
months is pretty remarkable. Last year, a seven-year bank loan at 4.5% was about 75 ba- sis points cheaper than a ten- year CMBS loan and 40 basis points cheaper than a ten-year agency loan. That would be a pretty easy decision for most investors as the simplicity of the non-recourse bank struc- ture is preferred by most. Only a couple months later, from the first discussion of a rate cut early this year and un- til very recently, that spread basically inversed, with few banks offering ten-year money and at rates around 50 basis
points above CMBS and 75 basis points above agency. When you combine that with the chance to obtain two or three-years interest only on the front end, and the banks’ general loathing to provide cash out on quick value add deals, all of the sudden the much maligned CMBS option starts to look pretty attractive in certain cases. The banks are starting to catch up for sure, with some of the most aggressive lenders offering rates in the high three per- cent range for as long as ten years. However, these deals
l e s s P l u g as to Why Y o u Ne e d A Mortgage Broker. L o o k i n g back on in- terest rates f o r mu l t i - family loans
R. Brenner Green
from the end of last year until now, the disparity in what type of lender was pro- viding the most competitive financing in those six or seven
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Real Property Capital is a Philadelphia based full service commercial mortgage banking firm with a regional focus and national capabilities. Our business model emphasizes client satisfaction through a high-touch, analytical approach that distinguishes us from the competition. Learn more about our distinct approach and proven track record of success at www.realpropertycapital.com. FOR MORE INFORMATION: R. Brenner Green, President 303 Harry Street • Conshohocken, PA 19428 • 610-456-9644 • firstname.lastname@example.org
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