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News release

LOS ANGELES, CA

Groundbreaking Loan Product Drives Financing for Affordable Housing Preservation in California

JLL secures $68.6 million in “Bridge-to-Resyndication” financing and tax-exempt loan extended interest rate lock


LOS ANGELES, Jan. 14, 2016 – On behalf of WNC Community Preservation Partners and Jamboree Housing Corporation, JLL’s Capital Markets experts today announced the firm has secured a $30.6 million Freddie Mac Bridge-to-Resyndication loan for the acquisition of Summer Field Apartments, a 268-unit affordable housing property located in the Palm Springs submarket of Indio, California. JLL also simultaneously executed a $38 million Freddie Mac Tax-Exempt Loan (the “TEL”), featuring an 18-month forward interest rate lock.
 
Managing Director Tim Leonhard led the JLL team on the transaction.
 
“It can be very challenging for dedicated affordable housing owners/operators to compete in today’s fast-moving market for the acquisition of existing multifamily properties, especially larger high-profile assets like those in California,” said Leonhard. “The high-leverage bridge loan, combined with the TEL, fills the need for short-term, efficient acquisition financing while simultaneously protecting the owner from future interest rate risk. This ultimately leads to the preservation and significant rehabilitation of affordable housing units versus the potential of traditional cash-on-cash investors purchasing those units.”
 
“Summer Field Apartments is our third successful closing with JLL and the team brought tremendous expertise to the table, given their experience with the complexities of transactions of this nature,” said Anand Kannan, President of WNC Community Preservation Partners. “This included various regulatory agreements imposed by California and HUD, as well as the challenge of structuring a low-income housing tax credit and bond-financed transaction.”
 
The bridge loan features an 85 percent loan-to-value ratio and has an 18-month, interest-only term and an interest rate closing of 2.58 percent. The TEL loan features a fixed rate of 4.52 percent on a 16-year term with two years of interest only followed by a 35-year amortization schedule.
 
Additionally, the TEL interest rate lock offered the flexibility of a 10 percent downward resizing without penalty, should certain loan sizing assumptions change between the time of initial closing and the closing of the TEL. The borrower also has the ability to increase the TEL amount at final closing at a blended rate should income exceed the amount underwritten at initial closing.
 
The Bridge-to-Resyndication Loan product, coupled with an extended interest rate lock for the eventual long-term fixed interest rate loan, meets customer demand to quickly and competitively acquire existing Low-Income Housing Tax Credit (LIHTC) properties at or near the end of their 15-year compliance periods, while also allowing borrowers to position those properties for recapitalization using low-income housing tax credits and long-term fixed-rate tax-exempt financing. JLL worked closely with Freddie Mac to develop, document and implement this new loan product which debuted earlier this fall with the groundbreaking financing of The Parks at Fig Garden.
 
JLL Capital Markets is a full-service global provider of capital solutions for real estate investors and occupiers. The firm’s in-depth local market and global investor knowledge delivers the best-in-class solutions for clients — whether a sale, financing, repositioning, advisory or recapitalization execution. In 2014 alone, JLL Capital Markets completed $118 billion in investment sale and debt and equity transactions globally. The firm’s Capital Markets team comprises more than 1,700 specialists, operating all over the globe.
 
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About JLL
JLL (NYSE: JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. A Fortune 500 company with annual fee revenue of $4.7 billion and gross revenue of $5.4 billion, JLL has more than 230 corporate offices, operates in 80 countries and has a global workforce of approximately 58,000.  On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 3.4 billion square feet, or 316 million square meters, and completed $118 billion in sales, acquisitions and finance transactions in 2014. Its investment management business, LaSalle Investment Management, has $57.2 billion of real estate assets under management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit www.jll.com