Richard Bassuk, president of The Bassuk Organization, Inc. and chief executive officer of Greystone Bassuk Group, announced the completion of a program to refinance nine Maxx Properties (Maxx) with refinancing proceeds aggregating $140 million.
Bassuk stated that in 2012 Maxx asked TBO to analyze its portfolio and suggest various refinancing and enhancement strategies.
With respect to Maxx’s Denver portfolio, TBO advised Maxx to undertake a renovation program and refinance existing mortgages with HUD on the basis of the enhanced rents resulting from the renovations.
Despite the prepayment penalties under the terms of existing mortgages, TBO determined refinancing was highly accretive to the long-term profitability of Maxx’s portfolio due to low interest rates and the substantial increase in loan proceeds that Maxx secured through HUD’s unique refinancing program. HUD sized new mortgages based on Maxx’s renovated rents.
Upon the closing of refinancings under Phase I of this program, Maxx realized substantial net proceeds after prepayment penalties and all costs associated with the refinancing.
Keith Halperin, counsel to Maxx Properties, said, “This ingenious refinancing program was conceived by Mr. Bassuk, and enabled Maxx to eliminate deferred maintenance, renovate apartments to a high standard, and realize substantial project proceeds utilizing the HUD program and the low level of interest rates.”
Halperin went on to add that “since interest rates continue at a low level, Maxx is now proceeding with Phase II of a similar program for additional projects.”
Rick Wiener, the CEO of Maxx Properties, said, “It has been a pleasure working with The Bassuk Organization. They bring to the transaction unparalleled dedication, expertise, and follow through.
“We believe it is unlikely that a program of this scope could have been successfully completed by any other financial intermediary with whom we previously had experience, and we look forward to continuing to work with TBO in the years ahead.”