Turley and Proscia of Cronheim secure $20.6 million acquisition loan

David Turley and Janet Proscia of Cronheim Mortgage secured $20.6 million in acquisition financing for an eight-building, 229-unit, multifamily portfolio located in the neighborhoods of Washington Heights and Inwood. The funding was sourced from two banks, each of which financed four buildings for $10.6 million and $10 million, respectively, on a non-recourse, non-crossed basis. The combined facility provided 79% loan-to-cost financing for the $26 million purchase. The weighted average rate was fixed at 4.01%, which included a six-month forward rate lock, for a 10-year loan term on a 30-year amortization schedule for each loan. The properties are all five-story walk-up, rent stabilized apartment buildings ranging in size from 18 to 68 units. Three of the eight have income from commercial or antenna tenants. Most are mid-block locations. HPD violation counts average almost four per unit but we were able to get the lenders to overcome this obstacle. "Manhattan-located rent stabilized apartments are a favored asset class in the debt world, but many lenders struggle with buildings that have high HPD violation counts and heavy commercial income," said Turley. "We solved this by breaking the portfolio into two halves and financing each with a different bank to reduce the concentration risk to each lender. While cumbersome to coordinate two lenders simultaneously, it led to a favorable outcome for the client, who locked in attractive long-term financing at 79% of purchase price."