Freddie Mac and Pensam have teamed up to fund a $220 million recapitalization of Landmark South, a 631-unit multifamily complex in Doral, in Miami, Florida.
The transaction is notable given the size of the $65.8 million preferred equity component, which makes up about 32 percent of the deal, funded by Miami-based investment manager Pensam. Freddie Mac funded the remaining $154.1 million of the five-year loan. JLL Capital Markets arranged financing on behalf of the sponsor, JSB Capital Group.
Pensam, which is focused on the multifamily family sector via a combination of direct equity investments, mezzanine debt, preferred equity, and bridge loan, is seeing a growing need for financing that fills the gap between what a senior lender will offer and sponsor equity.
“The current interest rate environment is leading to compressed senior loan proceeds, which in turn is creating funding gaps that can be addressed with preferred equity or mezzanine debt,” said Hen Shoval, director of investments at Pensam. “Over the past few years, we have closed well over one hundred transactions of this kind and are therefore experienced to navigate through complex transactions in compressed timeframes.”
Behind the loan
Landmark South, built in two phases in 2017 and 2021, is located at 6055 NW 105th Court. Its amenities include outdoor courtyards and fitness centers.
JLL fielded numerous bids in which the advisory said was a highly competitive market for preferred equity investors. “[That] alongside strong senior financing from Freddie Mac to significantly lower its cost of capital on this trophy asset,” said Jesse Wright, a senior director at JLL, who was part of the team which arranged the financing.
The loan will be serviced by JLL Real Estate Capital, a Freddie Mac Optigo lender.