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News release

Kenewick, Wash.

New Loan Product Fuels Preservation of Affordable Housing in Washington State

Security Properties and JLL secure $25 million in Bridge-to-Resyndication financing and a $34 million tax-exempt loan extended interest rate lock

On behalf of Security Properties, JLL's Capital Markets experts today announced the firm has secured a $25 million Freddie Mac Bridge-to-Resyndication loan (the "bridge loan") for the acquisition and rehabilitation of Heatherstone Apartments, an existing 455-unit affordable housing property located in Kennewick, Washington. Security Properties simultaneously executed a rate lock on a $34 million Freddie Mac Tax-Exempt Loan (the "TEL"), featuring a 30-month forward rate lock term.

Managing Director Tim Leonhard led the JLL team on the transaction.

"The bridge loan, combined with the forward rate lock TEL, allowed Security Properties to quickly and efficiently acquire much needed existing affordable housing stock and to cement plans for the preservation and rehabilitation of the affordable housing stock 30 months from now," said Leonhard. "Freddie Mac's new Bridge-to-Resyndication program, which JLL helped develop last fall, is playing a major role in the preservation of affordable housing by allowing dedicated affordable housing developers to compete with traditional cash on cash buyers to quickly acquire existing affordable housing stock while eliminating interest rate risk on a future preservation transaction at the time of initial acquisition. We see significant runway and increased demand ahead for this loan product."

The bridge loan features an 82.50 percent loan-to-value ratio and has a three-year, interest-only term and an initial rate of 2.87 percent. The TEL loan features a fixed rate of 4.63 percent on a 17-year term with two years of interest-only followed by a 35-year amortization schedule.

"The preservation of Heatherstone Apartments is at the core of our mission," said Bryon Gongaware, Manager Director of Affordable Housing at Security Properties. "This transaction presented several challenges: with the TEL, we were able to close quickly and compete with conventional buyers, and forward rate lock the tax exempt bonds, mitigating a key risk in the transaction. With this financing, Security Properties has a well-defined plan to execute a significant renovation to the property that will improve the apartment community and preserve housing affordability for the long term."

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.

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 2015 alone, JLL Capital Markets completed $140 billion in investment sale and debt and equity transactions globally. The firm's Capital Markets team comprises more than 2,000 specialists, operating all over the globe.

Security Properties is a national real estate investment, development, and operating company headquartered in Seattle, Washington. For more than 45 years, Security Properties has provided quality housing to its residents as well as excellent financial performance for its investors. Since its founding, Security Properties has acquired or developed over 66,500 residential units at a cost of over $3.35 billion. Security Properties maintains a focused multi-family strategy supported by integrated teams of professional acquisition, development, construction, investment, and property management specialists.  For more information, visit

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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 $5.2 billion and gross revenue of $6.0 billion, JLL has more than 230 corporate offices, operates in more than 80 countries and has a global workforce of more than 60,000. On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 4.0 billion square feet, or 372 million square meters, and completed $138 billion in sales, acquisitions and finance transactions in 2015. Its investment management business, LaSalle Investment Management, has $56.4 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