CBRE Capital Markets’ Debt & Structured Finance team has arranged more than $150m in Fannie Mae financing to refinance The Markham Apartments, an 80-building, 504-unit residential community in downtown Cupertino, California, Real Estate Capital has learned.
The 10-year, fixed-rate, full-term, interest-only loan carries a flexible prepayment feature and locks in low interest rates as talk of impending rate hikes from the Fed intensifies.
“CBRE and Fannie Mae’s willingness and ability to utilize a streamlined rate lock program to eliminate the risk of market volatility and interest rate risk was extremely meaningful,” said Eron Kosmowski, VP of finance with the borrower, Prometheus Real Estate Group.
“We were able to have our rate locked within a matter of days of signing the loan application and preceded to a smooth loan closing with peace of mind.”
The Class A, garden-style property at 20800 Homestead Road offers a luxury lifestyle but also serves Silicon Valley’s working class, employed by nearby technology companies, noted Andrew Behrens, who arranged the financing out of CBRE’s San Francisco offices with Jesse Weber. The community is minutes away from the offices of major tech companies including Apple, Infosystems, HP and Symantec.
“The unique location and quality of this property, combined with the diverse tenant mix and community makeup, is a driving factor in why Fannie Mae felt comfortable providing the loan on the property at the terms offered,” Behrens said.
Fannie Mae provided $28.9bn in financing to the multifamily market in 2014, working with lender partners to finance 446,000 units of multifamily housing. But after the Federal Housing Finance Agency (FHFA) in May revised the income threshold criteria for affordable housing and excluded certain housing from $30bn annual origination caps set earlier this year, many believe the total number will come in closer to $40bn this year.
Federal Reserve Board Chair Janet Yellen has also indicated that the first major rate hike in nearly a decade could come before year’s end, which could further accelerate CRE financings as owners scramble to secure low rates.
The Markham is currently 97% occupied and amenities include a clubhouse with a gourmet kitchen, community room with lounge, junior Olympic-sized pool, a hydrotherapy spa, private theater, business center with Wi-Fi and fitness center.