October 16, 2020
CBRE has arranged a refinancing on Houston’s Vintage Apartments in what’s reportedly the first multifamily loan indexed to the Secured Overnight Financing Rate (SOFR) to be purchased by Freddie Mac. Introduced in 2018, SOFR is replacing the longstanding Libor benchmark rate.
CBRE arranged the refi of a $20-million bridge loan for Vintage Apartments, a 292-unit multifamily project in Houston’s Brookhollow/Inwood neighborhood.
The 10-year floating rate loan indexed to SOFR was made to two commercial real estate investment companies based in Houston. CBRE’s Houston office closed the loan.
“By utilizing the new SOFR-indexed floating rate loan programs of Freddie Mac and Fannie Mae, a sponsor can obtain a very attractive cost of capital typically in the 2.5-3.0% range for loans 70% LTV and higher, while maintaining exit flexibility at a very low cost, typically 1% of the loan value,” said CBRE’s Mitchell Kiffe.
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