ATLANTA, GA – Preferred Apartment Communities announced the refinancing in the second quarter of 2017 of two Class A multifamily communities: Stone Creek Apartments located in Houston, Texas and Grandeville at Avalon Park located in Orlando, Florida.
PAC refinanced Stone Creek utilizing a non-recourse first mortgage HUD loan originated by PGIM Real Estate Finance. The new loan package is approximately $20.6 million, bears interest at a fixed rate of 3.47% per annum, matures in July of 2052 and amortizes based on a 35-year schedule.
PAC refinanced Avalon Park utilizing a non-recourse first mortgage loan from Freddie Mac originated by PGIM Real Estate Finance. The new loan package is approximately $67.4 million, bears interest at a fixed rate of 3.98% per annum, matures in July of 2024 and amortizes based on a 30-year schedule.
“The refinancing of Stone Creek demonstrates PAC’s ability to create value in our assets and refinance them accretively. The Stone Creek transaction allows PAC to pull out almost $3.0 million in additional loan proceeds while lowering the total borrowing cost by over 1.25%. We can then reinvest the additional proceeds generated to help provide us with further opportunities to acquire well-located, newly constructed and high-quality multifamily communities in our core markets,” said John Isakson, Executive Vice President and Chief Capital Officer for PAC. “
Mr. Isakson added, “The refinancing of our loan at Avalon enables the Company to mitigate its interest rate risk resulting from our previous floating-rate loan and lock in a stable and low fixed interest rate.”
Preferred Apartment Communities was formed primarily to acquire and operate multifamily properties in select targeted markets throughout the United States. As part of its business strategy, they enter into forward purchase contracts or purchase options for to-be-built multifamily communities and we may make real estate related loans, provide deposit arrangements, or provide performance assurances, as may be necessary or appropriate, in connection with the development of multifamily communities and other properties.