Hunt Provides $35M Refinance for Pennsylvania Multifamily Portfolio
Hunt Real Estate Capital has provided $35.2 million in Fannie Mae loans for the cash-out refinance of a four-property multifamily portfolio in Reading, Penn., Commercial Observer can first report.
The loans have a 12-year term, 11.5-year yield maintenance and 30-year amortization. All of the loans carried green rewards pricing provided through planned water conservation upgrades.
Metropolitan Management—a local developer and management company whose real estate portfolio consists of 2,000 multifamily units in 15 multifamily properties—is the sponsor, sources told CO. Hunt also financed Metropolitan’s Reed Farm multifamily project last year, in a transaction that marked the owner’s first Fannie Mae DUS loan.
James Conley of HFF in Philadelphia represented the sponsor in the deal.
“These loans were rate locked at application in early August under the Fannie Mae streamlined rate lock program,” Bryan Cullen, a managing director at Hunt Real Estate Capital said. “The sponsor was extremely rate sensitive and to achieve his target we needed to close in just 45 days.
“Interestingly, we locked the loans at a total of $33.9 million but, with the delivery tolerance built into the sale of the securities, we could move the loan amount up or down up to 5 percent without penalty before funding,” Cullen continued. “In this case improved operations and strong appraisals allowed us to up the dollars by 4 percent.”
The four properties range from 77 units to 161 units and were built in the 1950s and 1960s. Proceeds from each of the loans will be used to implement a variety of internal and external improvements, including green upgrades.
Reading is 65 miles northwest of Philadelphia’s central business district. With its manufacturing-heavy economy gaining traction, the metro area has entered late-cycle expansion, according to information provided by Hunt.
Officials at Metropolitan Management could not immediately be reached for comment.