Greystone Bassuk Group has arranged the $586 million refinancing of a six-state, 34-property residential rental portfolio owned by real estate firm Maxx Properties through government agency lenders.
The deal refinanced $450 million of existing debt and adds to it $136 million of new debt that will be used in part to renovate the properties, which span New York, Florida, Nebraska, Nevada, Arizona and Colorado.
Fannie Mae and Freddie Mac provided nearly two-thirds of the 34 loans, HUD provided one-third, while conventional lenders provided just two, without any cross-collateralization.
The average loan interest rate ranged from 6 percent to a little over 4 percent, and the average loan maturity was 18 years, Richard Bassuk, chairman and CEO of advisory firm Greystone Bassuk Group, told Real Estate Capital.
HUD allows refinancings of existing HUD mortgages based on rents they plan to charge after renovations to their properties rather than existing rents through the agency’s Section 223(f) program, which Bassuk described as a meticulous process.
“We presented a very detailed business plan for [HUD], which showed month-by-month how we were going to renovate each apartment, the projected increase for each apartment, and the cost of construction for each apartment,” said Bassuk. “This was not just reaching into our right pocket; it took months to get hard quotes and all the pieces.”
Robert Wiener, chairman of Maxx Properties, said in a prepared statement that the refinancing enables Maxx to “renovate apartments to a higher standard, eliminate deferred maintenance and realize substantial cash proceeds while reducing the overall debt service on our portfolio.”
The Greystone Bassuk Group, a joint venture between The Bassuk Organization and Greystone, a leading national provider of multifamily loans, is a real estate capital intermediary and advisory firm that provides expanded real estate and financial services.