Richmond, VA, Dec. 18, 2018 (GLOBE NEWSWIRE) — Berkadia Commercial Mortgage, Jefferies and Riverside Capital announced the financing of Fairwood Apartments, a garden-style multifamily property in Carmichael, California (Sacramento County). The deal consists of a $12.6 million Tax Exempt Fannie Mae Mortgage Backed (M-TEBS) bond transaction with four percent low-income housing tax credits (LIHTC), which funded approximately $6.4 million in equity. As part of the deal, the project will have a new 20-year HUD rental assistance contract, meaning that none of the 86 households will have to pay more than 30 percent of their income towards rent. The closing of this financing preserves Fairwood Apartments as an affordable housing asset for the long-term.
The financing is the first such transaction involving all three affiliated firms, each playing a critical role in their respective specialty areas. The bonds were issued through the California Housing Finance Agency (CalHFA) for affordable housing developer Orbach Affordable Housing Solutions, LLC (OAHS). A single-purpose corporation controlled by OAHS, called OAHS Fairwood LP, is the owner. The deal closed on November 29.
Berkadia’s Senior Director Gemma Geldmacher and Managing Director Richard Price originated the financing, teaming up with Managing Director Lloyd Griffin, Senior Director Frank Brown and Senior Underwriter Mark Field to underwrite the Fannie Mae M-TEBS DUS loan. Alan Jaffe and Robert Foggio were the lead investment bankers for Jefferies, and Riverside Capital’s team syndicated the tax credits.
The combination of debt and equity raised by the Berkadia-led team will provide sufficient funds to acquire the project and allow for approximately $3.4 million in rehabilitation – including updates to residential units and system upgrades.
“The Fairwood financing was an ‘all hands-on deck’ deal,” said Price. “The team worked hand-in-glove with CalHFA, which demonstrated unwavering support in further fulfilling its preservation of the affordable housing mission. HUD also played a key role in approving the long-term subsidy contract and assigning it to the project.”
“In California, homeowners spend the highest amount of their annual income on housing and continually struggle to pay their rent,” said Jay Reinhard, President of OAHS. “This is why we are committed to improving the housing market so that Americans can live without the fear of losing their homes. We are honored to be involved in this great project.”
The pass-thru fixed rate on the bonds was 3.75 percent with a loan term of 15 years underwritten and a 35-year amortization. Fannie Mae yield maintenance premium from closing is through May 31, 2033. Thereafter, a one percent prepayment penalty will apply through August 31, 2033. After this, no prepayment premium will apply. The loan was debt service constrained at 1.15 times the debt service coverage ratio.
Located in the Fair Oaks neighborhood of Carmichael, the project was originally developed in 1981 and has a mixture of one-, two- and three-bedroom units. Carmichael is less than ten miles away from downtown Sacramento in an area that has seen tremendous growth in the past decade.
About Berkadia® & Jefferies:
Berkadia Commercial Mortgage LLC (and its associated entities, collectively “Berkadia”) is a joint venture, formed in 2009, between Leucadia National Corporation (“Leucadia”) and Berkshire Hathaway. Both Jefferies Financial Group Inc. (which is the new name of Leucadia) and Berkshire Hathaway own a 50 percent equity interest in Berkadia. Jefferies Financial Group Inc. also owns 100 percent of Jefferies Group LLC, which is the 100 percent owner of Jefferies LLC, a broker-dealer.
Berkadia is a leader in the commercial real estate industry, offering a robust suite of services to our multifamily and commercial property clients. Through our integrated mortgage banking, investment sales and servicing platform, Berkadia delivers comprehensive real estate solutions for the entire life cycle of our clients’ assets.
To learn more about Berkadia, please visit www.berkadia.com.
About Riverside Capital, LLC (Riverside):
Riverside Capital, LLC, a joint venture of Berkadia and The Michaels Organization, is a full-service tax credit investment company offering capital solutions to developers of high-quality affordable housing. National in scope and serving both for-profit and nonprofit developers, Riverside has guided the financing and syndication for more than 7,700 affordable apartment homes across the country, representing $1 billion of equity capital. With a network of strong investor relationships and a focus on transparency, competitive pricing, and long-term value creation, Riverside is committed to providing financial solutions for affordable housing communities and that lift the lives of the residents who call those communities home.
© 2018 Berkadia Proprietary Holding LLC. Berkadia® is a registered trademark of Berkadia Proprietary Holding LLC.
Commercial mortgage loan banking and servicing businesses are conducted exclusively by Berkadia Commercial Mortgage LLC and Berkadia Commercial Mortgage Inc.
Investment sales / real estate brokerage business is conducted exclusively by Berkadia Real Estate Advisors LLC and Berkadia Real Estate Advisors Inc.
This advertisement is not intended to solicit commercial mortgage loan brokerage business in Nevada.
In California, Berkadia Commercial Mortgage LLC conducts business under CA Finance Lender & Broker Lic. #988-0701, Berkadia Commercial Mortgage Inc. under CA Real Estate Broker Lic. #01874116, and Berkadia Real Estate Advisors Inc. under CA Real Estate Broker Lic. # 01931050.
For state licensing details for the above entities, visit: http://www.berkadia.com/legal/licensing.aspx
CONTACT: Mary Cosmides Berkadia 215-328-1757 Mary.Cosmides@berkadia.com
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