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1/19/18
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Walker & Dunlop Inc has structured a $100 mil, Freddie Mac Revolving Credit Facility for Presidium Group LLC. The credit facility was initially secured by two properties, Solaris and The Violet, both located in Austin, TX, and was structured with an additional $50 mil in excess capacity for a potential of $150 mil in total financing.
Solaris is a 562-unit, garden-style apartment community located at the intersection of East Riverside Dr and Royal Crest Dr, just three miles southeast of the Austin central business district. The Violet is a 160-unit, garden-style apartment community near the intersection of E William Dr and I-35, six miles south of downtown Austin.
Alex Inman led the Walker & Dunlop team in arranging the financing. The five-year, flexible, non-recourse, secured line of credit was structured with a full term of interest-only payments. This type of financing allows the sponsor to secure credit and pricing terms prior to identifying property assets to back the debt. The terms remain in place for the duration of the facility and a borrower can move assets in and out of the facility with no requirement to substitute assets.
“Structured products can pose many new challenges not found in conventional agency products. Loan documents are different; the underwriting is different; even obtaining credit approval is different. Due to these complexities, many lenders don’t even consider this offering, but after careful analysis of the borrower’s investment strategy and long-term goals, it became increasingly evident that a Freddie Mac credit facility was going to be the most beneficial to the overall project,” added Inman.
The sponsor has significant experience with distressed or underperforming apartment communities in strong-performing metropolitan areas. Presidium plans to coordinate with in-house and third-party architects to renovate the acquired assets. The goal is to reposition the assets as superior properties, distinguished from their respective local competition.
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