Grandbridge Funds $96.7 Million Multifamily Portfolio through Freddie Mac

Published On: 05.20.08

FT. LAUDERDALE—Grandbridge Real Estate Capital recently funded a $96,785,000 multifamily loan portfolio comprised of four first mortgage loans secured by Bridgeport Apartments, Duraleigh Woods Apartments and Sailboat Bay Apartments in Raleigh, N.C. and Lexington Apartments in Nashville, Tenn.

Proceeds from the loans, sold by Grandbridge to Freddie Mac, were used to acquire the properties. The four loans were made under Freddie Mac’s Acquisition Upgrade MortgageSM product, designed for the acquisition of multifamily properties with renovation subsequent to purchase planned.

Lexington AptsThe Lexington Apartments, a Class A development in Nashville, Tenn., was funded at $45,000,000. The acquisition upgrade financing has a seven-year term, with three years of interest-only and a 30-year amortization.

Our client, New Dawn Companies, LLC, wanted a loan structure with maximum flexibility, a floating rate, prepayment ability and a fast closing. As a Program Plus® seller/servicer, we knew that Freddie Mac's Acquisition Upgrade Mortgage was the natural choice for this transaction, which was one of four properties in the portfolio—all of which were funded through Freddie Mac. Working as a team, Grandbridge and Freddie Mac got this particular deal done, from commitment to closing, in about 48 hours. We're confident that the success of the Lexington Apartments deal will lead to even more transactions with this client—and Freddie Mac—in the future.

Our customer wanted a floating rate with flexible prepayment ability and an unusually quick closing. We got the Lexington application signed by our borrower late on a Monday afternoon and were closed by Wednesday morning—basically 48 hours—closing this transaction in record time. Working closely with Freddie Mac and having our own in-house closing team made all the difference.

Sheila Mead, CEO of New Dawn Companies, LLC, reflected that their experience with Freddie Mac and the team at Grandbridge has set a new standard for the company and future acquisition financings. According to Ms. Mead, "The process with Freddie Mac was amazingly seamless." Sheila's team is quick to praise the Grandbridge organization. "An important part of our transactions has to be responsiveness from all parties...we received nothing short of outstanding service from the entire Grandbridge team."

Noting that the Acquisition Upgrade product had not been specifically tailored for an ARM, Michael Meers, Freddie Mac Southeast Region managing director explained that Freddie Mac pulled features of both its ARM and Acquisition Upgrade products to arrive at a successful closing. “The transaction matched creativity against a tight time line, and Freddie Mac, Grandbridge, and the borrower won,” he said.

The 598-unit development near the Brentwood area was built in 1996 and 1997 and features multiple one-, two- and three-bedroom floor plans with an average size of 1,000 square feet. Amenities include a clubhouse, three swimming pools with sun decks, an indoor pool, two 24-hour fitness facilities, lighted tennis courts, a sand volleyball court, a business center, entertainment center, a car care facility and two 24-hour laundry facilities. Units feature gas fireplaces, nine-foot ceilings and decks or patios, with select units offering vaulted ceilings, intrusion alarms and garages. Planned upgrades to the property include the addition of a state-of-the-art gym, an internet café, and renovation of the existing clubhouse.

Bridgeport AptsNew Dawn’s portfolio contained three additional multifamily properties in Raleigh, N.C.: Bridgeport Apartments, Duraleigh Woods Apartments and Sailboat Bay Apartments. Bridgeport Apartments, a 276-unit garden style apartment complex on 17 acres of land, was funded at $18,675,000. The floating-rate first mortgage was structured on a five-year term, with three years of interest-only and a 30-year amortization. Amenities to the property include a recreational building, swimming pool, clubhouse, tennis courts and athletic facilities.

Sail Boat BaySailboat Apartments, a 192-unit development on 17 acres of land, was funded at $9,800,000. The floating-rate first mortgage was structured on a seven-year term, with three years of interest-only and a 30-year amortization.

 

 

Duraraleigh Apts.Duraleigh Woods Apartments, a 362-unit development with 293,856 square feet of rentable space, was funded at $23,220,000. The floating-rate first mortgage, structured with a five-year term, with three years of interest-only, features a 30-year amortization.

Charlotte, N.C.-based Grandbridge, a subsidiary of BB&T Corporation (NYSE: BBT) principal subsidiary Branch Banking and Trust Company, is one of the largest full-service commercial and multifamily mortgage banking companies in the nation. Grandbridge is a Fannie Mae DUS® (Delegated Underwriting and Servicing) lender, a Freddie Mac Program Plus® seller/servicer and an active participant in multifamily products insured by the Federal Housing Administration (FHA). With a current servicing portfolio of more than $21 billion, representing 96 capital providers, Grandbridge is an S&P “Above Average” rated servicer.

Grandbridge, one of the largest full-service commercial and multifamily mortgage banking companies in the nation, arranges permanent commercial and multifamily real estate loans, services loan portfolios, and provides asset and portfolio management as well as real estate brokerage services on a national basis. The company has a broad capital provider base that includes insurance companies, CMBS lenders, pension fund advisors, and commercial banks as well as a proprietary lending platform—enabling Grandbridge to close more than 1,000 transactions in 2007.