Freddie Mac Provides $275M Financing in $473M Multifamily Portfolio Acquisition
By Cathy Cunningham March 13, 2019 9:00 am
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Freddie Mac (FMCC) has provided $275 million in financing to Fairfield Properties for its $473 million acquisition of a seven-property multifamily portfolio in Nassau and Suffolk Counties, N.Y, Commercial Observer has learned.
CBRE (CBRE)’s Jason Gaccione, Shawn Rosenthal, Maxi Leachman and David Webb negotiated the 15-year, fixed-rate debt under Freddie Mac’s Green Advantage program, sources said.
The multifamily portfolio was purchased from Lone Star Funds earlier this month, as first reported by The Real Deal.
The properties were constructed between 1951 and 1975 and include the 452-unit Southern Meadows in Bayport, N.Y., the 368-unit Lake Grove Apartments in Lake Grove, N.Y.; the 242-unit Westwood Village in Westbury, N.Y.; the 232-unit Mid-Island Apartments in Bay Shore, N.Y., the 82-unit Cambridge Village in Levittown, N.Y., the 80-unit Heritage Square in East Meadow, N.Y.; and the 40-unit Yorkshire Village in Levittown, N.Y.
CBRE arranged financing for six of the seven assets in the transaction—the Mid-Island Apartments asset was not financed— comprising 1,264 units.
“The locations fit perfectly into our portfolio,” Gary Broxmeyer, a managing partners of Fairfield Properties, said in a statement. “We look forward to upgrading them to the Fairfield standard so we can provide a premier level of service to the residents.”
Chevy Chase, Md.-based investor FCP teamed up with Fairfield, making a $100 million preferred equity investment in the deal, according to a news release at the time of the sale. The transaction marks FCP’s first investment in the Long Island market.
“This investment continues FCP’s strategic initiative to expand its structured investment business by providing preferred equity on existing multifamily assets,” FCP Senior Vice President, E.J. Corwin said in an announcement.
CBRE’s Jeffrey Dunne, Gene Pride and Eric Apfel, along with CBRE Capital Advisors’ Alexander Virtue led the sale.
“We are pleased to have been part of the sale of this exciting portfolio,” Dunne said in prepared remarks. “There was incredible interest in the properties, as this class of ‘workforce housing’ is in high demand because of a shortage of quality Class B apartments and the slow pace of new construction on Long Island. These factors created an opportunity for astute investors, like Fairfield Properties, to capitalize on strong market fundamentals. Fairfield Properties is already the largest owner of apartments on Long Island and this acquisition significantly adds to their portfolio. Consistent with Fairfield’s reputation of using ‘best practices’ to operate and maintain their properties, they plan to invest heavily in upgrading common areas and unit finishes throughout the portfolio.”
The portfolio is in line with Fairfield’s investment thesis of buying high-quality, Class-B assets in markets with high barriers to new construction, access to diverse employers and strong school systems, according to information from CBRE. The assets benefit from significant investment from previous ownership, resulting in high occupancy, continued rent growth and resident retention.
Officials at Freddie Mac were not immediately available for comment.
