NewPoint Executes First Freddie Mac Q Securitization

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NewPoint Real Estate Capital has closed its first deal through Freddie Mac’s Q securitization program.

The Manhattan-based lending platform, which launched in June 2021, closed a $199 million securitization of eight floating-rate first-mortgage bridge loans for the same number of garden-style apartment assets totaling 1,705 units and built between 2016 and 2022 in Texas, New Jersey and Nevada. Barclays (BCS) and Wells Fargo (WFC) co-led the transaction, with Citigroup (C) and Drexel Hamilton also providing support.

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Commercial Mortgage Alert first reported the deal, which closed May 31. The properties are owned by eight undisclosed sponsors. 

The Freddie Mac Q program, which debuted in 2014, features fully guaranteed pass-through bonds similar to its K Certificate platform. David Brickman, CEO of NewPoint, said the Q-deal approach was more conducive for the current volatility, which has largely shut down the collateralized loan obligation (CLO) market.

“The Freddie Mac Q process is relatively user-friendly in terms of being well defined and prescribed with not a lot of third parties in terms of rating agencies or others that need to be involved,” Brickman told CO. “It makes it more straightforward in terms of understanding what the criteria are to make for a successful Q securitization.”

At the time of issuance, 88 percent of the units in the eight properties were affordable to renters earning 80% of area median income88 percent of the units in the eight properties were designated as affordable housing. The loans include seven acquisition deals and one refinance. Six of the properties are in Texas with one each in New Jersey and Nevada.

Brickman noted that the experience of Barclays and Wells Fargo was integral in getting the deal across the finish line against the backdrop of uncertainty over whether the U.S. would default on its debt

“If we could do it over again, we’d rather we weren’t trying to securitize a deal in that environment,” Brickman said. “But I think the very thoughtful, strong stewardship from the folks on the desks at Barclays and Wells Fargo really enabled us to get very good execution and weather the turbulence that was coming from places other than our direct market.” 

Andrew Coen can be reached at acoen@commercialobserver.com