Eastern Union Funding negotiated a series of multi-family loans in the Bronx totaling $35.65 million for one client.
The loans were originated by senior managing director Eli Breiner.
The string of deals reflects the solvency of multifamily product in New York City, according to Breiner, who refinanced a total of 360 residential and six commercial units, arranging an average of $99,000 per unit and a $9 million cash-out.
The arrangement gave the borrower an additional $9 million to invest after the roughly $25 million in existing debt was covered .
The loans were provided by Customers Bank and feature rates ranging from 3.25 to 3.75 percent.
“Getting that amount per unit was a well-deserved bonus for my client,” Breiner said. “It came through a combination of working with the bank and factoring in inflation, pro-forma, really establishing an understanding of the virtual non-risk of units staying vacant in that area.”
The large cash-out on one of the loans allowed Breiner’s client to dramatically reduce interest payments and “leverage their assets in a manner that could allow them to effectively use their cheapest source of equity — their own real estate.”
The deals come at a time when the market is positioning itself for growth in the multifamily market, according to Breiner.
According to the most recent report from Ariel Property Advisors, New York City multifamily transactions in October reached 70 for only the second time this year due in large part to a surge in small building sales.
In October, the city saw 70 transactions comprised of 99 buildings totaling $648.259 million in gross consideration — a 40 percent increase in transaction volume, a 41 percent increase in building volume, and a 61 percent increase in dollar volume compared to October 2012.
According to Breiner, demand in the affordable housing market will continue to drive lending patterns in the coming year.
“There is a well-discussed trend existing within this housing surge that the number of people spending 30 percent of their annual income on housing is up 12 percent,” noted Breiner. “The market lacks affordable rentals for middle-income Americans. This deal falls into this underserved market and another area of raging debate: rent stabilized housing, one of Mayor-elect Bill de Blasio’s key platforms
“Regardless of your stance on the issue, there is no doubt that the demand is there. Rent stabilized units are never vacant. It’s a matter of weeks to get one tenant out and another in.”