The 10-year CMBS loan on a portfolio of student apartments near the University of Alabama campus in Tuscaloosa was set to mature in July 2014. Hoping to maximize his cash out while minimizing debt service going forward and eliminate the risk of rising interest rates over the next year, the owner, ROAR, LLC, approached Chad Thomas Hagwood, executive vice president of loan originations headquartered at Beech Street Capital’s Birmingham office, to help him weigh his alternatives.
The ROAR portfolio was hardly typical. Its 264 units were scattered across 19 separate buildings on 25 noncontiguous tax parcels. And to complicate the situation even further, they were constructed over a period of 70 years between 1920 and 1992.
“Despite its apparent complexity, we thought that the properties in the College Station Portfolio were an excellent fit for Fannie Mae’s Dedicated Student Housing program,” notes Hagwood. “And by going with Fannie Mae, we felt that we could secure a rate in the low four percent range, below than what he might have received from other alternative programs.”