Greystone’s Expands Its Bridge Financing Capabilities With $600 Million CLO Offering

Greystone, a leading commercial real estate lending, investment, and advisory company, announced the closing on September 13, 2019, for Greystone CRE Notes 2019-FL2, Ltd., a $600 million CLO backed exclusively by bridge loans on primarily multifamily properties.

Greystone CRE Notes 2019-FL2 is the company’s third CLO. The initial collateral pool for 2019-FL2 consists of 24 loans totaling $492.1 million that Greystone originated, secured by mortgages on 24 properties in nine states. Greystone will invest the remaining $107.9 million of CLO proceeds over the next 180 days into comparable mortgages. The CRE CLO accretively provides financing at a weighted average coupon at issuance of L+1.46%, before transaction costs.

“Our newest CLO expands our ability to meet the financing requirements of our borrowers. This transaction, coupled with our previously issued healthcare CLO, further strengthens our balance sheet as we continue to expand our match-funded non-recourse financing structures,” said Jeffrey Baevsky, Executive Managing Director of Corporate Finance and Capital Market Finance at Greystone. The company has successfully originated high credit-quality collateral with anticipated attractive returns through a well-established bridge lending program and experience working with investors, owners and operators in the multifamily and senior housing space. “This CLO further demonstrates Greystone’s role as a leader in multifamily lending,” Baevsky added.

The three-year actively managed CLO offers seven classes of notes, including a senior structure consisting of $336.75 million Class A tranche, with a AAA rating from Moody’s and Kroll Bond Rating Agency. Greystone will transfer most of the collateral from its 2017 CRE CLO into the new Greystone 2019-FL2 and its 2017-FL1 deal is expected to be fully redeemed.

All of the loans were originated by Greystone, which offers a bridge loan product as part of its lending program. Greystone has originated $4.7 billion in bridge loans since its program launched in 2004, and today, bridge loans make up approximately 5% percent of Greystone’s $35 billion loan servicing portfolio.

Greystone’s extensive participation in the broader multifamily market includes mortgage and mezzanine lending, management and ownership/operational advisory activities. The company is a top 25 U.S. commercial mortgage lender specializing in FHA, Fannie Mae, Freddie Mac, CMBS and short-term balance sheet lending. In 2018, Greystone originated over $1 billion in bridge financing, representing approximately 10% of Greystone’s $10.3 billion of annual loan origination volume.

Wells Fargo Securities, LLC, J.P. Morgan Securities LLC and UBS Securities LLC acted as placement agents of Greystone CRE Notes 2019-FL2, Ltd. with U.S. Bank National Association serving as Trustee.  

Burlington Capital, LLC (“Burlington Capital”) and Greystone & Co., Inc. (together with its affiliates, “Greystone”), today jointly announced they have successfully completed the previously announced sale by Burlington Capital and one of its subsidiaries interests in America First Capital Associates Limited Partnership Two (“AFCA 2”) to Greystone. AFCA 2 is the general partner of America First Multifamily Investors, L.P. (Nasdaq: ATAX), a publicly traded limited partnership.

“We are excited to announce the completion of this important milestone for our company,” said Lisa Y. Roskens, Chairman and CEO of Burlington Capital. “It is rare when you can find a company like Greystone that values your people, your business and your investors in the same way.”

“We are thrilled to welcome the ATAX management team to the Greystone family, and are confident that our synergies and combined areas of expertise will benefit ATAX clients and investors alike,” said Steve Rosenberg, founder and CEO, Greystone.

“With the completion of this transaction, Burlington Capital will continue to develop new and unique opportunities that join together private, institutional and public fund partners,” said Roskens.

Greystone Provided $19.3 Million in Financing for the Transaction, Which Maintains Affordable Housing for Low-Income Residents

Greystone Brown Real Estate Advisors announced it has closed the $23,450,000 sale of Shamrock Gardens, a multifamily property in Atlanta, GA. Greystone Brown advised the seller, Legacy Shamrock Community and brought the buyer, Alcott Capital, to the deal. The sale was handled by Barden Brown, Cory Caroline Sams, Taylor Brown, Chandler Brown, and Bo Brown, and a $19.3 million loan for the transaction was also provided by Greystone.

The transaction was financed with a 10-year Fannie Mae DUS® loan. The property had been previously financed with tax-exempt bonds, which were defeased at the time of closing. The bond financing resulted in the assignment of the existing Land Use Restrictive Agreement (LURA) by the buyer at the time of sale, thereby maintaining this affordable housing. The LURA requires a certain percentage of the units to be occupied by low-income residents until December 2028.

Built in 1967, Shamrock Gardens is an all-brick property with 344 units – including 1, 2 and 3 bedrooms as well as onsite laundry. Residents also have access to other amenities including a community center, computer room, two playgrounds, community garden and orchard. Located at 1988 Plaza Lane, the property has MARTA bus stops onsite and is a short distance from Camp Creek Market and Hartsfield-Jackson.

The property also offers a state-certified onsite daycare for children ages six weeks to 12 years old, which is open to both residents and non-residents. The daycare is a recipient of the Georgia Lottery Pre-K program, which is free and based on “Bright from the Start” requirements and standards.

“This transaction realized many firsts for our team, including achieving the fastest contract closing on a LURA restricted deal, which mandates that many of the units will remain affordable for years to come,” said Barden Brown, Senior Managing Director, Greystone Brown Real Estate Advisors. “We would like to thank the Atlanta Housing Authority for their collaboration and support. In working closely with both Legacy Shamrock Community and Alcott Capital on the sale and financing, we are also thrilled that this transaction includes a scholarship fund to be set up for staff and residents.”

Mezzanine Option Assists Property Investors in Completing the Capital Stack for Multifamily Acquisitions and Refinancings

Greystone, a leading commercial real estate lending, investment, and advisory company, has provided two Fannie Mae loans totaling $19.5 million to finance the acquisition of a 216-unit multifamily property in Haltom City, TX.

In addition to a Fannie Mae Delegated Underwriting and Servicing (DUS®) Green Rewards loan of $18,237,000, Greystone provided a $1,269,000 Delegated Lender Affiliate (DLA) Mezzanine loan to supplement the first mortgage. Both non-recourse loans, funded simultaneously, carry 12-year terms with different fixed interest rates. With a minimum of $1 million, a Fannie Mae DLA mezzanine loan must accompany a senior mortgage that carries a minimum amount of $10 million, and is secured by a 100% pledge of the equity interests in the borrower.

“Greystone’s mezzanine platform, highlighted by this innovative product from Fannie Mae, is a complementary option to assist property investors in completing the capital stack on acquisitions and refinancings,” said Anthony Alicea, head of production for Greystone portfolio lending group.  

Burlington Capital, LLC (“Burlington Capital”) and Greystone & Co., Inc. (together with its affiliates, “Greystone”) today jointly announced that Burlington Capital and one of its subsidiaries have agreed to sell all of their interests in America First Capital Associates Limited Partnership Two (“AFCA 2”) to Greystone  for $80 million in cash.  AFCA 2 is the general partner of America First Multifamily Investors, L.P. (Nasdaq: ATAX), a publicly traded limited partnership. The transaction is expected to close in the third quarter of 2019, subject to the satisfaction of customary closing conditions. 

“As a leading real estate lending, investment and advisory company, Greystone will be an excellent partner to provide new and exciting opportunities that will allow ATAX to work off a larger platform and build on its strategic initiatives and growth efforts,” said Lisa Y. Roskens, Chairman and CEO of Burlington Capital. “This transaction is an example of how Burlington Capital successfully grows businesses such as AFCA 2 that have a strong appeal in the marketplace to buyers such as Greystone.”

“Following Greystone’s growth and expansion in the capital markets over the last several years, this acquisition represents a natural extension of our core asset management business, further enabling us to grow and diversify in strategic areas,” said Steve Rosenberg, founder and CEO, Greystone.  “Burlington Capital helped to establish a strong direct bond purchase platform at ATAX, that we expect to continue to grow, and to continue to further our mission of serving the affordable housing market and beyond.”

“The ATAX team’s expertise in direct unrated tax-exempt bonds, as well as other alternative capital products, combined with Greystone’s deep expertise and capabilities in affordable  housing finance presents a compelling opportunity to build on the success of ATAX to date,” said Ken Rogozinski of Greystone.  “We look forward to playing a key role in the future of ATAX.”

ATAX is a limited partnership with approximately $1 billion of total assets primarily focusing on the acquisition, holding and sales of mortgage revenue bonds and other investments that provide construction and/or permanent financing for affordable and market rate multifamily properties.  After the sale of AFCA 2 closes, all ATAX employees will remain with ATAX in its Omaha, Nebraska headquarters.

“Burlington Capital and AFCA 2 have provided ATAX with an integrated platform by which we have been able to profitably grow our business,” said Chad Daffer, Chief Executive Officer of ATAX.  “We believe Greystone will enable ATAX to accelerate the achievement of its strategic initiatives for the benefit of our unitholders.”

Burlington Capital specializes in real estate portfolios with extensive experience in multifamily ownership, financing, construction, renovation, development and property management. Based in Omaha for over 30 years, Burlington Capital has acquired, financed and/or managed more than $7 billion in assets and sponsored 16 public and private real estate funds. The current Burlington Capital Fund VI follows the previous successful equity funds that leverage Burlington Capital’s expertise in building and managing multifamily equity funds.

“Burlington Capital will continue to be an international enterprise that successfully develops unique business opportunities that have delivered consistent dividends to private, institutional and public fund partners,” said Roskens.

Greystone, a leading commercial real estate lending, investment, and advisory company, has provided a $16 million HUD-insured construction loan for the development of White Oak Grove Apartments, a new 113-unit multifamily community in Asheville, North Carolina. The transaction was originated by Andrew Ellis in Greystone’s Rockville, MD office, on behalf of White Oak Grove Associates.

The loan provides 85 percent of the project costs, and carries a low, fixed interest rate during the construction period, followed by a 40-year term with straight amortization. HUD’s 221(d)(4) loan product enables construction or substantial rehabilitation of multifamily projects with long-term, fixed, low-rate financing. The property also will be built to comply with HUD’s ENERGY STAR requirement of a 75 score or higher to achieve a Green Mortgage Insurance Premium (MIP) reduction.

White Oak Grove Apartments will be located at the intersection of Hazel Mill Road and Clayton Avenue in West Asheville. The market-rate apartment community will consist of 10 garden-style walk-up buildings, with 12 one-bedroom units in two different layouts averaging 743 square feet and 101 two-bedroom units in seven different styles averaging 1,138 square feet. Each well-appointed unit will include granite countertops, in-unit washer/dryers, large walk-in closets, energy-efficient stainless steel appliances, and other upscale finishes. Community amenities will include onsite parking, a fitness room, community room and business center, a dog park, picnic areas and green space throughout. The property’s location offers easy access to shops, community services, restaurants and nightlife, and is near major roadways, including U.S. Route 74 and I-40, and the Asheville Regional Airport. The project is planned for completion in 2020.

“We are thrilled to help bring this new community to life in Asheville,” said Mr. Ellis. “Our team was able to put together the construction financing quickly so that our client can help meet the multifamily housing demands of this growing city. We are thrilled to help such a quality sponsor on this effort.” 

“Greystone’s precise execution and the way the team led us through each phase of this transaction was remarkable – they are truly the best in the business,” said Harry Pilos of White Grove Oak Associates. “We are excited that we can build this community from the ground up and look forward to working with Greystone on future investments.”