Atlanta REIT Broadtree Seals $100M Credit Facility, Eyes Expansion

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Real estate investment trust Broadtree Residential has lined up a $100 million line of credit from J.P. Morgan Chase, according to an announcement from the firm.

Broadtree, which boasts a portfolio of five Atlanta-area multifamily developments totaling more than 1,500 apartments, aims to use the funds to bolster balance-sheet flexibility as it looks to expand beyond Georgia’s state lines.

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In the past, Broadtree “had predominantly financed our assets with government-sponsored entity debt,” said Ryan Albano, Broadtree’s chief financial officer, referring to loans secured by agencies like Fannie Mae and Freddie Mac. “That’s certainly attractive from a cost-of-capital perspective, but we wanted to create some balance-sheet flexibility and get this line in place so that as we grow in scale, we can eventually migrate into the unsecured borrowing market.”

J.P. Morgan’s credit facility will be available for Broadtree at a floating interest rate above Libor, with adjustments built in depending on assets’ leverage profiles, Albano said. The balance sheet flexibility it provides should help on two fronts.

First, it could grant the REIT the financial ammunition to contemplate a northward expansion.

“We’re predominantly a Southeast-focused private REIT, with all of our office assets today in the Atlanta market. But we’re considering opportunities that stretch up into the Mid-Atlantic,” Albano explained.

Second, the balance-sheet flexibility the facility provides could go a long way toward bolstering Broadtree’s credibility when it comes to closing deals.

“I think it has benefits from a surety-of-close perspective,” Albano said. “Sellers in an acquisition, they want to know that the buyer is ready and willing to close. It will certainly help us as we’re making offers.”

A representative from J.P. Morgan Chase declined to comment on the deal.