Institutional Property Advisors Capital Markets (IPA Capital Markets) has arranged $45.1 million in acquisition financing to purchase an 18-building, 207-unit multifamily portfolio in Brooklyn.
Avanath Capital acquired the portfolio for $73 million in a joint venture partnership with New York-based Oak Tree Management last month.
The properties are located in Prospect Heights, Crown Heights, Williamsburg, and Bedford-Stuyvesant neighborhoods.
“This transaction shows that, despite the recent pull back of several major lenders, competition remains strong among New York and New Jersey savings banks,” said IPA Capital Markets’ Andrew Dansker.
“Experienced buyers involved in well-priced transactions are still achieving premium outcomes for their debt usage.”
Dansker and Lior Goldberg arranged the loan on behalf of the buyer, a real estate fund. IPA also represented the seller, a private investor, and procured the buyer.
“Another aspect of this loan that was unique was that it allowed the buyer to spin off outlier assets from the portfolio early on in the loan term with no prepayment penalty,” added Dansker.
The seven-year loan has a favorable interest rate of 3.77 percent. The amortization schedule is 30 years and the loan to value is 60 percent.
Assembled by the seller during the height of the recession in 2009 and 2010, the portfolio’s properties are located throughout central and northern Brooklyn.
The portfolio’s has four commercial spaces currently leased by a mix of local tenants that include Sunday Routine, a local restaurant/bar; Fool’s Gold Records, an independent hip-hop/electronic record label store and a day care center, among others.
The new ownership plans to undertake what it describes as “comprehensive renovations” as units turn over, including interior upgrades to the kitchens and bathrooms, remodeling of kitchen, and installation of new flooring, among other planned upgrades.
“This portfolio presented a rare opportunity to gain a substantial stake in one of the most dynamic markets in the nation,” says John Williams, president and chief investment officer of Avanath.
“Brooklyn’s explosive economic growth, population gains, and cultural renaissance are driving an influx of investment capital to this market, which consistently ranks as one of the most expensive places to live in the US.”