Morgan Stanley Lends $44M on Six Bronx Multifamily Assets [Updated]
Finkelstein Timberger East Real Estate has landed another Morgan Stanley loan to finance a collection of multifamily assets in the Bronx.
By Mack Burke January 30, 2020 1:00 pm
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Finkelstein Timberger East Real Estate (FTERE) has landed yet another Morgan Stanley loan to finance a collection of multifamily assets in the Bronx, Commercial Observer has learned.
FTERE got $43.8 million in permanent financing backed by six, mid-rise rent stabilized multifamily properties spread throughout the borough. The 10-year, interest-only loan pays interest to Morgan Stanley (MS) at a rate of 3.74 percent, sources told CO.
The loan, along with $367,497 in cash equity from FTERE, retired $40 million in previous debt from Bank United, paid prepayment penalties and closing costs and funded reserves, which included $3.1 million tied to pending property tax exemptions, according to information from Kroll Bond Rating Agency (KBRA), which analyzed the deal as part of its securitization.
The mortgage is being securitized in the $830.5 million Morgan Stanley-led MSC 2020-L4 commercial mortgage-backed securities (CMBS) transaction, and it represents 5.3 percent of the loan pool, according to information from KBRA.
A representative for Morgan Stanley declined to comment on the deal.
Bryan Manz, Rob Serra, and Emil DePasquale of Black Bear Capital Partners (BBCP), the real estate debt and equity advisory arm of Black Bear Asset Management, arranged the CMBS financing on behalf of FTERE, which owns over 3,500 units in the Bronx.
“This financing opportunity was rendered particularly attractive given the strength and quality of the assets, as well as the sponsor’s extensive history as ‘best-in-class’ operators,” Manz said in a prepared statement. “The lender also provided exceptional execution as we were able to arrange the loan with an earn-out structure in order to capture future upside in the properties.”
Altogether, the six properties — at 104 West 190th Street, 1055 Grand Concourse, 1354 Commonwealth Avenue, 2085 Valentine Avenue, 2264 Creston Avenue and 3425 Knox Place — comprise 300 rental units and five commercial spaces. They were built between 1918 and 1941.
As per information from KBRA, FTERE is working toward getting approval for a rent increase for all the properties through New York’s Major Capital Improvement (MCI) program.
Morgan Stanley has been on a multifamily lending spree in the Bronx over the last couple months.
Earlier this month, the investment bank lent $50.4 million to FTERE — arranged by BBCP — to refinance a separate portfolio of five Bronx rental properties, and shortly after that, it provided $142.6 million to Greenwich, Conn.-based multifamily investor The Morgan Group to refinance a collection of 18 multifamily properties in the borough.
Officials at FTERE could not immediately be reached for comment.
This story has been updated to include information about the loan’s securitization.
