PNC Funds Phase Two of Middletown Project to the Tune of $27 Million
Mark Scott’s Commercial Mortgage Capital has arranged a $27 million loan to finance the second phase of construction at an apartment complex in Middletown, N.Y.
The financing was through PNC Bank and will allow for the construction of an additional 120 units and retail space at Sterling Parc, which is located in the Hudson Valley. PNC also funded phase one of the complex, which will number 192 units in all.
Mark Scott told The Mortgage Observer that this most recent deal comes on the heels of his busiest summer yet, as borrowers race to lock in un-heard of rates.
“People want to lock down rates for not just 10 years, but sometimes 15 years or longer, even though the pricing might be higher,” Mr. Scott said, adding that borrowers that wouldn’t fathom absorbing a pre-penalty are doing it because of the rate environment. “Those two things are in the backdrop of something else that I’m hearing from borrowers. And that is that they feel that they better tie it down in the next 60 days or so because they’re waiting for the next shoe to drop.”
What exactly that “shoe” is runs the gamut, from the results of the pending U.S. presidential election to Israeli strikes against Iran. Regardless, Mr. Scott said, “Borrowers are just feeling the need and desire to tie things down now.”
In this case, the property’s owner, Sterling Properties of New Jersey, was able to tie down a loan at a sub 3 percent rate for three years, interest only. Mr. Scott said that the “$27 million absorbed the existing $8 million” loan on the project.
Construction on phase two of Sterling Parc has already started and the units are expected to deliver over the next 18 months.
With his busiest summer nearly over, Mr. Scott said that he anticipates staying busy. “The pipeline is full of multifamily construction deals,” he said of upcoming deal volume, “and there are still a lot of fixed-rate, permanent opportunities out there.”