 |
| 21-story, 150-unit luxury cooperative building on East End Avenue on Upper Side of Manhattan, NY |
 |
| Gregg Winter |
The borrower's main focus was on obtaining a new, 10-year,
fixed-rate, interest-only mortgage with a 3.25% interest rate to replace their
old 6.12% mortgage.
In addition, the borrower also required a $2,000,000
unsecured line of credit to provide flexibility to address unforeseen future
capital improvements and repairs.
The unsecured, revolving credit facility saved the borrower
$56,000 ($2,000,000 x 2.8%) in NYC mortgage recording tax (compared to a
secured facility like a credit line mortgage).
The co-op board
reached a consensus quickly and moved decisively in order to lock in a forward
commitment for this exceptional rate in a rising interest rate environment.
As is often the case, Winter & Company seeks to
customize the loan structure to meet the specific needs of each client. In this
co-op's case, two other special attributes of this financing are worth
highlighting:
Forward Rate Lock:
The co-op's old mortgage had a large yield maintenance
prepayment penalty. For them, a strategy of locking in a new, low rate for
their new underlying mortgage but delaying the closing by six months would save
the co-op a considerable amount of money on the cost of the pre-payment penalty
on their old mortgage.
This is the approach that was taken, with rate lock
occurring in May and the closing delayed until November.
Accelerated principal paydown option:
This cooperative also wanted to have the ability, should it
decide to do so, of being able to utilize surplus cash flow to pay down up to
10% of their remaining principal balance per year without triggering a
prepayment penalty.
In the event of such
principal reduction, the payments would also be adjusted accordingly going
forward. Although this is a highly unusual and non-standard feature in the
commercial mortgage marketplace, we were able to successfully structure this
option for our client.
The many post-war, white brick, 60's-era buildings all over
Manhattan's East Side are notoriously expensive to maintain.
This co-op wisely chose to take full advantage of the
availability of very cheap capital, thus the co-op emerged from the recent
refinancing with more than $6,000,000 of surplus cash which they can deploy to
address a long list of future capital improvements and repairs, not to mention
the $2,000,000 unsecured line of credit which will stand at the ready to
provide for future contingencies.
Winter & Company is a Manhattan-based, commercial
mortgage advisory firm that specializes in arranging development and
construction financing, multifamily and mixed-use property financing and
arranging cooperative underlying mortgages since 1989.
Its affiliate, W Financial Fund, LP is a direct private bridge lender
providing short-term, special situation financing primarily for NYC multifamily
and mixed-use properties celebrating its 10th year of successful operations.
W Financial was recently profiled in Barron’s. The article.
“Rock-Solid Real Estate” is available here.
For a complete copy of the company’s news release, please
contact:
Gregg Winter - President
Winter & Company
Creative Minds | Unparalleled Service ®
149 Madison Avenue, Seventh floor
New York, NY 10016
Phone: 212 532-1122 x1
Email: gregg@winterandcompany.com
No comments:
Post a Comment