PGIM Real Estate has arranged a $106.763 million Fannie Mae credit facility on behalf of a nationwide owner and operator of affordable housing communities for a nine-property multifamily affordable housing portfolio located across Texas, New Mexico and Colorado. PGIM Real Estate is the real estate investment and financing business of PGIM, the $1.5 trillion global investment management business of Prudential Financial, Inc. (NYSE: PRU).
The properties—encompassing more than 1,200 affordable units—are located in five different urban centers, all with strong demand for affordable housing. The 30-year fixed-rate loan will be used to repay existing debt and provide cash out that will be used to fund additional property acquisitions. The sponsor hopes to acquire enough properties to add $100 million or more of new debt to the facility over the next three to five years.
“This transaction’s success is a testament to our experience working together with strong sponsors and Fannie Mae to execute large and complex transactions that benefit both borrowers and tenants,” said Kenji Tamaoki, executive director of Agency Originations at PGIM Real Estate who originated the loan on the firm’s behalf. “For relatively little cost, the sponsor will have funds to improve the properties, provide better conditions for their residents, and expand their portfolio. When it came time to recapitalize, the sponsor chose us because we were able to offer a low interest rate, full leverage and the loan documents were pre-negotiated, allowing for quick acquisitions and refinances.”
Fannie Mae’s credit facility is geared toward giving borrowers the flexibility to manage debt across an entire multifamily portfolio to help achieve their long-term goals, allowing a combination of variable- and fixed-rate debt with laddered maturities and flexible post-closing features.
“Fannie Mae’s Credit Facilities are a great tool for financing affordable housing,” said Angela Kelcher, Senior Director, Multifamily Affordable Housing at Fannie Mae. “We are excited to work with PGIM Real Estate on this project to bring more affordable housing to these communities.”