Capital One announced it has provided a $7.3 million fixed-rate Fannie Mae loan to refinance Northland Lofts (now known as Park Lofts) a 152-unit mid-rise apartment complex in North Kansas City, Missouri.  Brian Sykes, a Senior Vice President in Capital One’s Boston office, originated the transaction.

The borrower, CDP Companies, was one of two general partners who oversaw the building’s conversion from a warehouse to affordable housing in 1999.  The conversion was financed by Fannie Mae credit-enhanced tax-exempt bonds as well as equity generated by the sale of Low Income Housing Tax Credits (LIHTCs) and Historic Tax Credits.  In January 2016, the owners completed the qualified contract process and began the three-year decontrol period to market-rate housing. The borrower used the proceeds from the loan to pay off the bonds and buy out the other general partner as well as the tax credit limited partners. 
 
“The borrower wanted to lock in a competitive long-term rate, maximize cash flow to help fund ongoing renovations, and maintain prepayment flexibility,” Sykes said.  “There were several objectives here, but Capital One always works with our clients to structure financing to meet their goals.” The seven-year fixed-rate loan carries two years of interest-only payments.  The modified prepayment structure requires yield maintenance until the end of the fifth year, at which point the prepayment penalty is reduced to one percent of the unpaid loan balance.
 
“Capital One looked for every opportunity to structure the loan to advance my goals for the property,” said Jim Watson, president and CEO of CDP Companies.  “They were the ideal partner for this transaction.”
 
Capital One Bank’s Commercial Real Estate Group provides financing in markets nationwide, offering a comprehensive array of solutions for property owners and developers, including balance sheet and agency lending, financing, underwriting, and treasury management.