Berkeley Point Masterfully Executes $325M in Refinancing for The Gateway, in San Francisco, CA

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1 berkeley point deals Berkeley Point Masterfully Executes $325M in Refinancing for The Gateway, in San Francisco, CA Bethesda, MD Berkeley Point Capital LLC and Freddie Mac recently closed a $325,000,000 refinance loan on The Gateway, a 1,254 unit multifamily property with over 62,000 sq. ft. of ground floor retail. The property was built between 1965 and 1967 on 7.74 acres in San Francisco s financial district. The ten-year, full-term interest-only loan has a fixed rate of 3.38%, and is the largest single-asset loan in Berkeley Point Capital s history. The loan was originated by Mitch Clarfield, Senior Managing Director at Berkeley Point. Situated on three blocks at the edge of San Francisco CBD, the property is bordered by Jackson St., Drumm St., Battery St., and Washington St. and is a prime location with expansive city and Bay views, offering residents easy access to shopping, employment, and the Financial District, Ferry Building, and the notable Embarcadero. Retail tenants at the property include Safeway, Bank of America and Starbucks. Berkeley worked with the Sponsor over an extended period of time to identify execution options. Already familiar with the sponsor and the asset, Berkeley Point and Freddie Mac were positioned to rate-lock in 15 days following the sponsor s selection of the

2 berkeley point deals execution option that best met its objectives. This was no small task given the size of the loan, the complexity of the borrower structure, the age of the property, and the volatile interest rate environment. Berkley Point also arranged for an extended rate lock at a small incremental cost to the borrower. The extended rate lock removed rate and spread risk from the situation, while allowing for amortization of the yield maintenance premium, providing substantial savings to the borrower. The asset has been in Berkeley Point s and Freddie Mac s portfolios since 1997, and this transaction represents their fifth financing of the property for the sponsor. Berkeley Point and Freddie Mac refinanced the asset in 1997 and then again in Second mortgages were placed on the property in 2001 as well as in Berkeley Point Capital and Freddie Mac had valuable knowledge about the asset and have a long-standing relationship with the asset s ownership group, giving us an edge in what was a very competitive process, said Mitch Clarfield, Senior Managing Director at Berkeley Point. We took a very proactive stance in hopes that we could provide our customer an opportunity to lock in a long term rate at what proved to be near historic lows. We worked closely with Freddie Mac to put an outstanding offer on the table. This is a one of a kind asset and we wanted it to remain in our portfolio for at least another 10 years. For more information, please contact: Mitch Clarfield, Senior Managing Director (p) (c ) mitch.clarfield@berkpoint.com 104-9/2013

3 berkeley point deals Berkeley Point Capital Facilitates $12.5M for Acquisition of Maple Gardens in Dallas, TX. Bethesda, MD Berkeley Point recently closed the acquisition financing of Maple Gardens, a Class A, 120-unit apartment community located in Dallas, TX. The financing was structured under the Fannie Mae DUS program as a ten-year deal term with two years interest-only at a fixed rate of 4.33 % and thirty -year amortization schedule. Newly constructed in 2011, the property includes three four-story, mid-rise buildings. The acquisition is a joint venture between Jeff Riggs and Scott Fisher of Baron Properties, and the American National Insurance company (ANICO). The venture is part of Baron Properties strategy to foray into the major multifamily markets of Texas, where the firm has an existing industrial portfolio. Baron Properties recently acquired AMLI Towne Square Apartments and The Cheval Apartments in Houston, TX, and currently has extensive multifamily operations in Colorado and Arizona. Maple Gardens is the fifteenth multifamily transaction between Baron Properties and Berkeley Point. Ed Belz, Managing Director, led the Berkeley Point team to structure the financing

4 berkeley point deals arrangement with Fannie Mae. Berkeley Point was able to arrange financing which included maximum loan proceeds and a two year interest-only period, while rate locking the deal rapidly, 15 business days following application. As always, I so appreciate Ed, he s a pro, and the whole Berkeley team, said Scott Fisher, Principal, Baron Properties. The recently constructed, Class A asset includes high end unit finishes and is in close proximity to downtown, Dallas and within walking distance to the city s high profile Medical District that includes world-renowned UT Southwestern Medical School and Center. The property is located close to major arteries and offers its residents superb visibility and access. The neighborhood is experiencing substantial redevelopment and expansion with over $1.2B being invested in the nearby Parkland Memorial Hospital. The area has also seen major economic growth from the construction of the DART light rail system and the modernization and expansion of nearby Love Field Airport /2013

5 sampling of west coast apartment deals Ogden, Utah 167 Units Acquisition/Renovation $7.2M Fannie Mae Rancho, Cucamonga, CA 496 Units Acquisition $71.5M Freddie Mac Los Angeles, CA 195 Units Refinance $32M Fannie Mae

6 recent deal testimonial Berkeley Point Capital Provides Flawless Execution in Acquisition Financing for Avalon at Civic Center, located in suburb of Los Angeles Berkeley Point recently closed acquisition financing of the 192-unit Avalon at Civic Center apartment community located in Norwalk, CA. The financing was structured under the Fannie Mae DUS program. Sares-Regis, the sponsor, partnered with the Berkeley Point team, led by Charlie Haggard, Kevin Mignogna and Mitch Clarfield. Bill Montgomery, Sares-Regis President, Multifamily Acquisitions for Investment and Development had this to say about the transaction: You were great! We had a lot riding on a flawless execution with our first fund deal and Kevin, Charlie, Mitch and the rest of the Berkeley team stepped up to get it done. We really appreciate the commitment and support you showed and we look forward to doing much more business together as we assemble our fund portfolio. June 27, 2013 For more information, please contact: Charlie Haggard, Director (p) (c) charlie.haggard@berkpoint.com Kevin Mignogna, Director (p) (c ) kevin.mignogna@berkpoint.com 120-9/2013

7 sampling of west coast deals Torrance, CA 436 units Refinance $30M Fannie Mae Los Angeles, CA 37 units Refinance $5.9M Freddie Mac Costa Mesa, CA 242 units Refinance $12M Fannie Mae For more information, please contact: Darrin Stovall, Director, Berkeley Point Capital (p) (c)

8 sampling of west coast deals South Jordan, UT 276 units Refinance $31.93M FHA Davis, CA 160 units Refinance $20M Freddie Mac Carmel, IN 166 units Refinance $5M Fannie Mae For more information, please contact: Scot Snowball, Director, Berkeley Point Capital (p) (c) /2013

9 b e r k e l e y p o i n t sampling of apartment deals in DC, MD & VA Alexandria, VA 727 Units Refinance $77 million Fannie Mae Falls Church, VA 493 Units Portfolio Refinance $62 million Freddie Mac Washington, DC 53 Units Refinance $16.1 million Freddie Mac

10 b e r k e l e y p o i n t sampling of apartment deals in DC, MD & VA Washington, DC 27 Units Refinance $7.9 million Fannie Mae Washington, DC 153 Units Refinance $ million Fannie Mae 106-9/2013

11 sampling of FHA deals b e r k e l e y p o i n t FHA 223(a)(7) $28.5M 254 units Refinance Lakewood, WA FHA 223(a)(7) $17.7M 216 units Refinance Knoxville, TN FHA 223(f)/LIHTC $2.7M 72 units Refinance Memphis, TN /2014

12 sampling of FHA deals FHA 223(f) $10.4M 264 units Refinance Lancaster, PA FHA 223(a)(7) $17.1M 142 units Refinance Nashville, TN FHA 221(d)(4) $19.3M 158 units Construction Lexington Park, MD /2014

13 HUD Low Income Housing Tax Credit HUD Low Income Housing Tax Credit (LIHTC) Pilot Program Parameters Program Description Eligibility Loan Term Maximum Loan Amount Interest Rate Provides permanent financing for affordable rental apartments with 4% or 9% LIHTCs including projects with Section 8 HAP contracts. Acquisition and/or Refinancing of Apartments with moderate rehabilitation (up to $40,000/unit) with 90% Project Based Rental Assistance. Permanent financing of stabilized newly constructed or substantially rehabilitated projects processed under the three year waiver rule. Permanent financing of moderate rehabilitation (up to $40,000/unit) of stabilized tax credit projects being resyndicated with new tax credits. Maximum 35 years or 75% of remaining useful life, whichever is less. $25 million Upon issuance of the HUD Firm Commitment; eligible for interest rate lock-in. Loan-To-Value Ratio Property Type LTV Refinance LTC Acquisition LTC DSC Subisized* 87% 100% 90% 1.15 Affordable* 85% 100% 90% MIP Annual Mortgage Insurance Premium (MIP) is 0.45%. *Must meet HUD and LIHTC definition of subsidized or affordable

14 HUD Low Income Housing Tax Credit Pilot Program HUD Low Income Housing Tax Credit (LIHTC) Pilot Program Parameters Recourse Pre-Payment Option Assumable Timing Other Pilot Program Benefits Non-recourse Negotiable. However, a common pre-payment option is a 1 year hard lockout followed by a prepayment penalty of 9% in the second year and declining 1% per year thereafter. Assumable, subject to HUD approval of a Transfer of Physical Asset (TPA) application. Pilot Applications receive HUD priority; typical processing time from app to closing is 120 days. Plans and Specs may not be required based on proposed work scope. General Contractor may not be required in some cases. Davis Bacon wages not required as long as HUD does not fund more than standard 223(f) limits or required by Issuer. Standard 223(f) 12 month repair period can be extended. New 20 year HAP contract if currently Section /2013 *Must meet HUD and LIHTC definition of subsidized or affordable

15 Freddie Mac Fast Track Early Rate-Lock Program Highlights Freddie Mac Fast Track Early Rate-Lock Program Highlights Description Eligibility Purpose Requirements Allows qualified borrowers the opportunity to rate-lock the entire coupon, establish the mortgage amount, and set all key provisions with reduced documentation and no breakage fees. Repeat borrowers who have had a Capital Markets Execution loan purchased within the last two years Applies to conventional cash (fixed or floatingrate) refinance transactions only (no acquisitions) 2% good faith deposit / 2% termination fee -5% / +0.05x inside policy-defined LTV and DSCR Must pass Refinance Test Tier 5 Markets or better Policy-compliant interest only Loans of limited complexity Loan Amount Capped at $50M Benefits Elimination of coupon risk Lock of both the Treasury Index and spread No breakage fees Simple, streamlined legal agreement and process No changes to underwriting requirements or standards Borrower principal certification replaces previously required forms Transaction terms, structure, and delivery are set at rate-lock 122-9/2013 requirements are subject to change

16 FHA products FHA Least expensive long-term non-recourse permanent finance debt available HUD s LEAN Program provides streamlined process for senior housing & healthcare transactions Market Rate, Affordable Housing, Licensed Independent Living Facilities (or maximum 25% non-licensed units), Assisted Living Facilities, Nursing Homes, Board &Care Facilities Fixed Rate; Self Amortizing; Acquisition, Refinance (35-year), Streamline Refinance Integrated Construction & Permanent Loans with no lease-up exposure (40-year loan) FHA 232 New Construction or Substantial Rehab Self contained construction, mini-perm and permanent loan One Rate Lock! 40 year term and amortization; construction period is interest only HUD will issue a conditional commitment subject to final plans and specifications Max 75% of HUD Appraised value (80% for skilled nursing); max LTVs increase 5 bps for non-profits Major movable equipment may be financed FHA 232 Pursuant to 223(f) Acquisition or Refinance Up to 35-year term and amortization; Maximum loan amount of 100% refinance cost or 85% acquisition costs, 80% of value or a loan amount at 1.45x DSCR; for non-profit max 85% LTV; No cash out, though Non-critical repairs and capital improvements may be included in the loan; mortgagor has up to 12 months from loan closing to complete repairs and improvements FHA 232 Pursuant to 223(a7) Refinance Program that provides the ability to refinance existing FHA loans /2014