Greystone Lends $31M for Luxury Apartments in Louisiana
Danielle Balbi Nov. 13, 2015, 2:30 p.m.
Greystone provided a Louisiana-based partnership with a $30.6 million loan for the construction of a 272-unit luxury multifamily property in Ascension Parish, La., Commercial Observer has learned.
The borrower, Noland McKay Manchac Limited Partnership—a joint venture led by the Baton Rouge, La.-based real estate firm Amesbury Companies—will use the proceeds from the Federal Housing Administration-insured loans to construct the 272-unit Manchac Lake Apartments.
Greystone Managing Director Donny Rosenberg originated the fixed-rate 221(d)(4) Federal Housing Administration loan. The financing carries a two-year construction period that converts into a 40-year permanent mortgage once the product is completed, he explained.
“In most suburban areas or secondary and tertiary markets throughout the country, it’s a good, solid option,” Mr. Rosenberg told CO over the phone in reference to the FHA deal. “If it’s a developer who is looking to build and flip, it might not be such a great option, but for guys who are developing for the long haul and want to lock in rates today, and never want to deal with maturity or interest rate risk, it’s a great option.”
While Greystone and Amesbury have worked together before, this transaction marks the first construction loan the lender has originated for its client.
“Greystone outdid itself again in working with us—particularly in underwriting such a complex deal,” Robert Peek, founder of Amesbury, said in prepared remarks provided to CO. “As an established player in the multifamily development space, we were well aware of the challenges that developing in an area such as a wetland area and flood zone could present.”
Once construction on the 23.3-acre site is finished, the property will house 132 one-bedroom units, 128 two-bedroom units and 12 three-bedroom units across 12 garden-style apartment buildings. The residential complex will also contain a business center, gym, indoor sport court, pool and garage. The development is due for completion in the next 18 months.
“The 221(d)(4) product continues to be a truly compelling option for new multifamily construction,” said Mordecai Rosenberg, who oversees Greystone’s FHA lending group. “It is still, by far, the longest term construction loan product available in the market and enables the developer to lock in a 40-year fixed interest rate prior to construction, instead of leaving them exposed to interest rate volatility over the next two to three years until the project is built and stabilized.”