The national non-bank commercial real estate lender Hunt Mortgage Group provided a Los Angeles-based real estate owner and manager with a $113.7 million Fannie Mae loan to refinance a 722-unit apartment complex in San Francisco, Calif., Commercial Observer has learned.
The 30-year, full-leverage agency financing on Lakewood Apartments at 515 John Muir Drive replaces a Merrill Lynch-sponsored commercial mortgage-backed securities loan taken out on the property in 2006. The $62.3 million CMBS loan, which carried an unpaid balance of $55.6 million at the time of the refinancing, was set to mature on Jan. 8, 2016.
The direct borrower, Delaware Lakewood Apartments LLC, is tied to the American Group, the holding company of Cal-American Corporation, which manages the San Francisco apartment complex. Fred Hameetman, listed as the American Group’s chairman and chief executive officer, was the sponsor behind the securitized Merrill Lynch deal, according to the original CMBS documents.
Peter Clasquin, a loan originator based in Hunt Mortgage Group’s Irvine, Calif. office, worked on the fully amortizing refinancing guaranteed by Fannie Mae.
“To do a 30-year, full-leverage loan with the right to release parts of the collateral to move around amenities and build on the released collateral was a difficult structure,” Mr. Clasquin told CO over the phone.
The agency deal allows the borrower to take out multiple supplemental loans and release portions of the new loan’s collateral to move around amenities and build additional units on the property, he added.
“Any securitized lender, including Freddie Mac and conduits, would require servicing approval for the partial releases and new construction,” Mr. Clasquin said. “Fannie delegated that review in approval to us and that’s the main reason we won the assignment.”
Additionally, the government-sponsored enterprises allow borrowers to take out other mortgages on the property, which “is a unique feature of the agencies” since conduits do not allow for more debt to be taken out on a property, he said.
Lakewood Apartments, which sits on Lake Merced, contains studio and one- and two-bedroom units ranging from 510 square feet to 1,115 square feet. Monthly rents range from $2,300 to $3,895, according to the property’s website.
Mr. Clasquin noted that most of the units in the apartment complex are excluded from the Federal Housing Finance Agency multifamily lending purchase cap, and that the rental units are not regulated but are considered “workforce housing.”
The apartment complex was built in 1974 and last renovated more than a decade ago. The property provides tenants with access to a pool, Jacuzzi, tennis courts, gym and lounge.
A representative for the American Group’s Cal-American Corporation did not respond to inquiries by time of publication.