Greystone, a real estate lending, investment and advisory company, has provided $27 million in Freddie Mac Small Balance Loans for an 11-property portfolio of multifamily units in Los Angeles, California, Real Estate Capital has learned.
The loans, provided under Freddie Mac’s Small Balance Loan offering, together represent one of the largest single-borrower portfolios closed using the recently launched platform.
Loan terms include a 10-year fixed rate, no recourse, loan-to-values up to 80%, and a step-down prepay structure.
The borrower, a private Los Angeles-based real estate investment group, acquired the properties over the past three years. They are located within Baldwin Village in South Central Los Angeles and range in size from 17 to 72 units per property,
“The 11 properties were spread out among four multi-asset entities, in combination with multiple investors, so it was imperative that the transactions closed concurrently and at the application terms,” said Greystone director Dale Holzer, who originated the loans out of the firm’s Newport Beach office.
As a result of the financing — of the 303 total units — the borrower will receive significant cash-out proceeds, which will be returned to investors. While the properties are classified as market-rate housing, 98% of the units will maintain affordable rent levels in line with Freddie Mac’s terms.
“We received quick, diligent feedback on documentation with insightful recommendations for improvement,” said Joanna Crawford, one of the main principals of the borrower group.
In October, $200m worth of multifamily, SBL loans originated by Greystone were bundled together and securitized through the program, marking the largest such securitization since Freddie Mac announced the initiative in October 2014.
The first was a $108m, 44-loan deal, FRESB 2015-SB1 Mortgage Trust, also originated by Greystone. A second, $109m, 42-loan securitization was backed by 42 loans originated by Arbor Commercial Mortgage.
In November the company hired former Freddie Mac professional Jay Kirsch as a managing director to focus on production of Small Balance Loans (SBL) across the Freddie Mac and Fannie Mae platform, reporting to Rick Wolf, senior managing director and head of production for Greystone’s small loan operations