CAMBRIDGE, MA–Cornerstone Realty Capital recently arranged $14.82 million in financing for the refinance of a portfolio of apartment properties located throughout Cambridge and Somerville, MA.
The portfolio, comprised of 35 units spread across 8 buildings, has a unit mix of (1) ground floor commercial unit, (5) one-bedroom units, (2) two-bedroom units, (14) three-bedroom units, (11) four-bedroom units, and (2) five-bedroom units. The properties range in size from a three-family to an eleven-unit building. The property owners have implemented a capital improvement plan at each property to optimize floor plans and achieve market rents.
These renovations included the improvement of the HVAC systems, the addition of modern white shaker cabinets and stainless-steel appliances in the kitchens, tiling the bathrooms and adding new combination tub/showers, and the refinishing of the hardwood flooring throughout the subject properties. The hands-on management style and routine improvements of the portfolio has resulted in the properties being consistently well-maintained with little to no deferred maintenance throughout. Because of this, the properties sustain at or near 100% occupancy while allowing for the property owner to incrementally raise rents along market trends.
Cambridge and Somerville are two of the most desirable and popular places for young professionals and families alike to reside due in large part to their proximity to the employment centers of Kendall Square and Downtown Boston as well as their individual local appeals. Cambridge and Somerville each possess vibrant neighborhoods and squares that are inundated with places to gather such as local bars, stores, and institutions. Notable institutions such as Harvard University, MIT, and Lincoln Technical Institute create a high demand for housing among graduate students, high-tech and medical professionals, affluent “empty nesters” seeking a live-work-play lifestyle, and families looking to take advantage of the well-developed transportation infrastructure and highly touted public school systems.
Patrick Brady, vice president at Cornerstone, remarked that, “This portfolio financing was a great display of maneuvering the restrictions brought on by Covid-19, and success and execution on all sides of the table. We were appreciative of working with a bank that was willing to allow for digital third-party inspections that provided tenants with comfort during the early stages of the statewide shutdown. The borrower was able to lower their rate and recapitalize, allowing for future acquisitions, growth, and renovations of their existing assets. And the loan was underwritten, closed and funded with all parties working remotely. A textbook case study for streamlining the commercial real estate financing process!”
Cornerstone was able to arrange a low 10-year fixed rate followed by a 30-year amortization schedule.