March 14, 2019
Two years after acquiring the 310-unit Rancho Mirage Apartments, owner Oak Residential Partners LLC obtained permanent financing for the property, which is in the Las Colinas neighborhood of Irving, TX. Brett Hood with NorthMarq’s Chicago office facilitated the $30.7 million, fixed-rate loan for the Chicago-area owner.
The Freddie Mac financing was structured with three years interest-only, followed by a 30-year amortization cycle, with par prepayment during the final two years of the loan term. Oak Residential bought the 19-year-old asset at 1200 Hidden Ridge in early 2017, and so far invested $2 million in property improvements.
“The nature of Freddie Mac’s conventional fixed rate program allowed the sponsor to retire their existing ARM debt without incurring a prepayment/exit fee, completely eliminated interest rate risk during the loan term, and significantly increased the sponsor’s projected returns through extended interest only and reduced coupon rate,” Hood said.
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