Apollo Commercial Real Estate Finance, Inc. (ARI) announced the company closed a commercial real estate loan transaction totaling $130 million, bringing year-to-date total capital commitment and deployment to approximately $879.0 million. ARI also announced the company received $34.5 million from the repayment of a first mortgage loan secured by a multifamily property in Brooklyn, NY.
ARI closed a $130.0 million junior mezzanine loan secured by the equity interests in a portfolio of 155 healthcare properties representing 18,662 licensed beds across 20 states. The mezzanine loan is part of a $1.05 billion whole loan which consists of a $710.0 million first mortgage loan, a $165.0 million senior mezzanine loan provided by investment funds managed by subsidiaries of Apollo Global Management, LLC (together with its subsidiaries, “Apollo”) and a $175 million junior mezzanine loan, which includes ARI’s $130.0 million loan and $45.0 million of pari passu junior mezzanine loans provided by investment funds managed by Apollo. The whole loan is being used to refinance existing debt on the portfolio, which includes a $39.0 million mezzanine loan provided by ARI in 2014, which was repaid. The floating rate junior mezzanine loan has a two-year initial term with three two-year extension options and an appraised loan-to-value of approximately 62%. The junior mezzanine loan has been underwritten to generate an internal rate of return (“IRR”)(1) of approximately 12%.
Commenting on the transaction, Scott Weiner, Chief Investment Officer of the Company’s manager, said: “This transaction demonstrates ARI’s commitment to provide the Company’s borrowers with creative capital solutions. For this transaction, ARI worked with an existing borrower to tailor the loan for their specific financing needs, while at the same time generating an attractive, risk-adjusted return for ARI.”
Apollo Commercial Real Estate Finance is a real estate investment trust that primarily originates, invests in, acquires and manages performing commercial real estate first mortgage loans, subordinate financings, commercial mortgage-backed securities and other commercial real estate-related debt investments. The company is externally managed and advised by ACREFI Management, LLC, a Delaware limited liability company and an indirect subsidiary of Apollo Global Management, LLC, a leading global alternative investment manager with approximately $186.3 billion of assets under management as of June 30, 2016.