PGIM sets $259m Fannie Mae credit facility for West Coast multifamily portfolio

New Jersey manager continues West Coast lending momentum with agency deals for the Sobrato Organization.

PGIM Real Estate continued its West Coast lending streak this week by arranging a $259 million Fannie Mae credit facility for six multifamily assets owned by the Sobrato Organization.

The Newark, New Jersey-based manager closed the deal on October 24, extending its debt activity streak in the region into the fourth quarter of 2023 after an active third quarter filled with refinancings and acquisition financings.

The $259 million facility from Washington, DC-based government-sponsored enterprise Fannie Mae will be used by Sobrato to have more funding optionality across the six-asset, 1,141-unit portfolio.

Natalia Todorov, executive director at PGIM Real Estate, told Real Estate Capital USA the deal was necessitated by an upcoming maturity. She noted that despite a decline in acquisition activity, PGIM’s borrowers continue to have financing needs within their existing portfolios.

“Credit facilities provide addition, substitution, release and borrow-up rights while benefiting from a crossed portfolio, which can be helpful during times of increased volatility,” said Lauren Kiesel, head of agency structured transactions at PGIM Real Estate.

PGIM has historically been an active lender across the multifamily space and this year ranked as one of the top debt fund managers across the landscape in Real Estate Capital USA’s Debt Fund 40. Last year, the firm originated $9.1 billion in multifamily loans, including through the use of Fannie Mae and McLean, Virginia-based government-sponsored enterprise Freddie Mac.

The Sobrato deal comes a little over a week after the firm detailed succession plans for its $45 billion agency loan servicing portfolio with the upcoming retirement of its division leader, Mike McRoberts.

As private credit managers have sought more commercial real estate debt market exposure, agencies such as Fannie and Freddie have become increasingly pivotal to those initiatives.

Beyond PGIM’s October deal with Fannie, this month has also seen Irvine, California-based manager Sabal Investment Holdings complete the acquisition of five Freddie Mac b-pieces from securitized deals with a collateral balance of $2 billion.