Kay Finance Closes Construction Financing for Texas Apartment Asset
World Development Company (WDC) has secured $42 million of U.S. Department of Housing and Urban Development (HUD)-backed financing for construction of a Texas multifamily development, Commercial Observer has learned.
Kay Finance arranged for a $37 million senior HUD 221(d)(4) loan and $5 million limited partner equity placement on behalf of La Sienna Apartments, a 288-unit complex in Edinburg, Texas. The loan is 85 percent loan-to-cost, with a 3.25 percent interest rate and a 40-year amortization schedule.
Davis-Penn Mortgage was the HUD lender on the transaction. Baruch Litwin and David Gibber from GLJ Real Estate assisted in securing the equity placement alongside Kay Finance CEO Yair Tilson.
“These loans can take months upwards of a year to get completed, but the end product is a very inexpensive, high-leveraged loan that automatically moves from a construction loan to a permanent loan,” Tilson said. “The project has great timing, especially due to COVID; the rental market has been extremely hot throughout most markets in the U.S., including this local market of Edinburg.”
Great Neck, N.Y.-based Kay Finance is a boutique capital advisory firm specializing in debt and equity placement. The firm has closed more than $1 billion in transactions, including a $200 million revolving credit facility for Faropoint from Keybank (KEY) Real Estate Capital last August.
San Antonio, Texas-based WDC is a newly established development management firm led by CEO David Salazar. Prior to co-founding WDC, Salazar owned and operated Regency Contracting & Development, a full-service construction firm established in 1998.
Salazar could not be immediately reached for comment.