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The Henley Group was engaged to provide loan assumption consulting services on three multifamily CMBS portfolios totaling $41 million and secured by 40 workforce housing buildings. Our role was to underwrite the assets, evaluate property financials, and manage the loan assumption process on behalf of our client.
Challenge:
Workforce housing is inherently difficult to underwrite given the older age of the buildings and the complexities associated with the tenant demographics. During the assumption process, one of the properties was destroyed by fire, introducing additional hurdles in navigating the insurance proceeds for demolition and rebuild. Beyond these issues, we faced a lack of comprehensive information from the current owner, which complicated the underwriting of capital expenditures and overall property performance.
Solution:
THG successfully facilitated the assumption of the 3 loans for our client. By leveraging the in-place CMBS financing, the client was able to take advantage of an interest rate approximately 250–300 basis points below current market levels with 6–7 years of term remaining. This outcome not only mitigated risk in a complex transaction but also provided the client with a significant competitive advantage and long-term financing stability.
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