Walker & Dunlop structures $35m loan for mixed-use scheme in US
October 08, 2019 – US-based real estate finance company Walker & Dunlop has arranged $35m financing through the United States Department of Housing and Urban Development (HUD) for a mall-to-multifamily redevelopment project, Renaissance Santa Rosa, in Mary Esther, Florida.
The nine-acre department store site adjoining the Santa Rosa Mall will be redeveloped into a walkable, mixed-use community.
Rea Ventures Group and Radiant Partners, the developers of the project, intend to use sustainable construction techniques so that the project can qualify for the National Green Building Standard (NGBS) designation.
The company has used HUD’s 221(d)(4) construction programme to finance the project.
Walker & Dunlop vice president and loan officer Heather Olson said: “The HUD 221(d)(4) financing structure is a perfect fit for developers looking to revitalize aging retail locations with new multifamily and mixed-use developments.
“The low interest rate, 40-year loan allows our clients to maximize their leverage and provide the construction and permanent financing needed to create beautiful and sustainable apartment homes for our communities.”
HUD’s 221(d)(4) construction programme reduces interest rate risk for the developers by combining construction and permanent financing in a single fixed-rate loan.
The implementation of HUD’s Green mortgage insurance premium (MIP) reduction programme has also brought favourable interest rate for the clients.
Walker & Dunlop vice president Marty McGrogan said: “Apartment complexes and hotels are two of the most popular new uses that retail landlords are choosing to explore.
“Creating a mixed-use center where people can live, work, shop, and dine is a perfect solution, and we foresee this becoming a useful model as properties evolve to meet the current user’s demands.”
Renaissance Santa Rosa, located along the ‘Emerald Coast’ between Pensacola and Panama City and within two miles of the Eglin Air Force Base complex, is expected to cater to the military families and residents seeking a more urban lifestyle.
The project is expected to be completed in the fourth quarter of 2020.
Upon completion, the luxury apartment complex will comprise four buildings with 229 one-, two-, and three-bedroom units.
The market rate apartments will comprise a private patio or balcony, in adding to premium fixtures and finishes. Community amenities will include a two-storey clubhouse, resort-style pool, business centre, gaming room, exercise facility, picnic areas, playground, and a dog park.
Earlier in 2019, Walker & Dunlop arranged $121m financing to Encore Capital Management-controlled private REIT Rescore Property to fund the construction of Plantation Walk, a master-planned development in Plantation, Florida.