NorthMarq Arranges $98.4M Bond Securitization for Multi-Family Portfolio

July 20, 2011
By Barbra Murray, Contributing Editor

Mariposa Apartment Homes in San Marcos, Tex.

Capitalizing on its seller-servicer relationship with government-sponsored enterprise Freddie Mac, NorthMarq Capital has orchestrated an approximately $98.4 million tax-exempt bond securitization for a portfolio of 11 bonds owned by TCH I Depositor L.L.C.

The group of bonds consists of loans secured by 11 affordable housing communities totaling 2,210 units located in 11 U.S. markets and owned by 11 different entities. All of the properties, including the 182-residence Mariposa Apartment Homes at Hunter Road for active seniors in San Marcos, Tex., were developed with Low-Income Housing Tax Credits.

Long-term financing for tax-exempt bonds is not easy to come by for any bond manager. “It’s a niche market,” John Reed, senior vice president and senior director in NorthMarq’s Omaha Regional office, told Commercial Property Executive. Reed, along with colleagues Marty Meagher and Gardiner Champlin, senior vice presidents and managing directors in the commercial real estate services provider’s San Diego Regional office, arranged the transaction. “Large banks like Bank of America provide 1-year financing for tax-exempt bonds, but Freddie Mac has the TEBS program where they offer 10-year financing, so that makes it special. It’s a much more stable source of funds.”

NorthMarq executes has executed about one TEBS deal each year for the last few years, so for a borrower, obtaining the financing is, as Reed described it, “a big deal.” In October 2010, NorthMarq acted as the servicer on a $95.8 million TEBS deal for a bond portfolio secured by 15 multifamily properties, on behalf of America First Tax Exempt L.P.

“TEBS is an excellent opportunity for the client to obtain long-term financing,” he added. “It’s a real niche. It’s not a standard program we’re doing, but we hope we can do even more of them. The group at Freddie Mac is headed by Clayton Davis and they do an excellent job working with NorthMarq to produce a successful outcome for our clients.”