BETHESDA, MD. — Walker & Dunlop Inc. (NYSE: WD) has arranged a $278 million Fannie Mae credit facility for Milestone Apartments REIT (TSX: MST.UN). The facility, which consists of both fixed and variable rate notes with staggered maturities, is collateralized by 20 Milestone multifamily properties in Arizona, Florida, Georgia, Tennessee and Texas.
The Toronto-based REIT holds a total portfolio of 55 properties in the Southwest and Southeast United States. Walker & Dunlop structured the original facility for Milestone in 2005 and added additional assets to the facility in 2008.
“We have worked on this portfolio for years and each time have taken steps to ensure that we structure a loan that meets Milestone’s strategic needs,” says Howard Smith, COO of Walker & Dunlop. “We look forward to continuing our relationship with Milestone and providing them with the financing to continue to grow their multifamily portfolio.”
Milestone is using approximately $28.1 million of this facility to fund, in part, its two most recent acquisitions: the 316-unit Harbor Creek apartment community in metro Atlanta and the 384-unit Legacy Heights multifamily complex in metro Denver.
The REIT purchased the Atlanta asset for a total of $28 million, representing a cap rate of 6.8 percent, and the Denver asset for a total of $50.3 million, representing a cap rate of 6.5 percent. Separate mortgages on the properties cover the remainder of the purchase prices beyond the $28.1 million from the facility.
Andrew Tapley led the Walker & Dunlop team that arranged the facility, which includes interest-only payments for the full term. The facility closed within 44 days of the interest rate lock-in.
Milestone is the largest REIT traded on the Toronto Stock Exchange and focuses solely on the U.S. multifamily market, targeting mostly garden-style properties. The REIT’s internal property management company, Milestone Management, operates not only Milestone’s approximately 17,000 units, but also another 18,000 units in the United States owned by other entities.
Founded in 1937, Bethesda, Md.-based Walker & Dunlop provides financing solutions through its own balance sheet, CMBS conduit and investments funds, as well as Fannie Mae, Freddie Mac, life insurance, bank and other CMBS lenders. The company’s stock price closed at $14.85 per share yesterday, down from $18.72 per share a year ago.
— John McCurdy