PHILADELPHIA – September 28, 2017 – Berkadia today announced the closing of a $103.4 million loan package to support the acquisition and repositioning of a seven-property multifamily portfolio totaling 996-units located in Harrisburg and Allentown, Pennsylvania. Senior Director Matt Cullison and Associate Director Patti Henne of Berkadia’s Philadelphia office secured the financing on behalf of RP Management, Inc. The seller was Equus Capital Partners, Ltd, and the deals closed on September 27.
Five of the seven properties were financed through Fannie Mae’s Delegated Underwriting and Servicing (DUS®) platform. The portfolio includes multiple garden-style apartment properties which had a steady operating history, but were aging. With a significant renovation plan, including water-saving improvements, RP Management qualified four of the properties for Fannie Mae’s Green Rewards program and procured 10-year terms at a 3.71 percent fixed interest rate and an 80 percent loan-to-value ratio.
Two of the properties included excess land with the potential for future apartment development, which presented a challenge. Since both properties and the excess land were located on one parcel, RP Management sought a lender that could provide competitive permanent and future construction financing on the same site. Liberty Bank, based in Connecticut, stepped forward with the best execution. Liberty provided a seven-year, non-recourse fixed rate loan at a 75 percent loan-to-value ratio and has agreed to underwrite the future construction financing when needed.
“Although there were a lot of moving pieces involved with this portfolio transaction, the entire process was very smooth from start to finish because we were dealing with high quality sponsorship on both sides of the table,” said Cullison. “Furthermore, RP Management received great financing terms because of their established track record in these submarkets with each of these lenders.”
With this portfolio acquisition, RP Management’s portfolio now exceeds 5,600 units. Founded in 1992 by Michael Cohen, RP Management specializes in the ownership and management of both market-rate and project-based Section 8 communities in secondary and tertiary markets throughout Pennsylvania.
With the closing of this transaction, Berkadia’s Philadelphia regional office has placed over $2 billion in financing in YTD 2017.