2001 Transactions
Tremont Arranges $7,350,000
Refinancing of Two Manufactured Housing Communities
The Annapolis office of Tremont Realty Capital, Inc. arranged
financing for the refinance of two separate manufactured
housing communities located in New York. Tremont arranged
a $3,025,000 loan for the Countryside Manufactured Housing
Community located in Newfane, NY. This 175 site community
is 95%+ occupied with a limited amenity packaged and has
room for expansion. The second loan was for Hidden Creek
Community, located in Hamlin, NY. Hidden Creek was refinanced
for $4,320,000, which includes roughly $500,000 that the
borrower will be able to earn out over the next 36 months
based upon rent increases and a planned expansion of 35
sites. Hidden Creek was also 95%+ occupied at the time of
the loan funding. The borrower, based in New York, was unwilling
to lock into a long term fixed rate today because of the
planned expansions at both communities.
"It was important that loan provided
flexibility to recapture future equity appreciation before
locking up the properties with long-term debt" said
John Chase, Senior Director at Tremont. Tremont structured
both loans as a three-year interest only note with the ability
to convert to 10 year fixed rate loan at anytime after the
first 12 months. The initial interest rate was a remarkable
5.82%. The loans are non-recourse and allow prepayment flexibility
after the first 12 months. This structure allows the client
the ability to expand the properties while maximizing cash
flow due to the interest only nature of the loan. Upon completion
of the expansions the borrower will be able to convert to
a10 year fixed rate loan and will also have the ability
to re-lever the properties to 80% of the then appraised
value.
For additional information on this transaction,
please contact:
John Chase
Senior Director
Email: jchase@tremontcapital.com
Phone: 410.604.1744
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