Modern Craftsman at Ten Mile

Essex arranged a $25,500,000 loan to refinance a 135-unit Build-For-Rent (“BFR”) community in Meridian, ID, approximately 14 miles west of downtown Boise. Modern Craftsman at Ten Mile (“Subject Property”) is a Class A, recently built project that provides residents a unique living experience that offers the amenities and maintenance-free experience of a professionally managed multifamily community paired with the benefits of a low density, single-family home lifestyle. The Subject Property consists of 42 two-story townhomes with direct access garages and 93 single-story homes with fenced-in yards.

The Sponsor, an experienced multifamily developer/owner in the Rocky Mountain Region, built the Subject Property and had a construction loan expiring, which triggered the need for a refinance. Although the Subject Property recently stabilized, the Sponsor believed holding the property for a few more years would help maximize value before selling the property. Because the Sponsor wanted to be opportunistic in the event of a property sale, Essex sourced a 3-year, floating rate execution with a flexible prepayment penalty structure. The loan was placed with a life insurance company, who was able to offer better pricing and flexibility than the agencies. The $25,500,000 loan paid off the construction debt and returned a small amount of equity to investors.

“This deal is a great example of how life insurance companies can be more competitive than the agencies. Life insurance companies are willing to underwrite aggressively and have a forward-looking approach on NOI, while agencies need to stick to strict underwriting guidelines” said Cooper Williams, President of Essex.