On behalf of Joseph Daibes, Collette Daibes, and Alexander Daibes (collectively, the “Sponsor”), Greystone & Co., Inc. is pleased to present the opportunity to provide $10MM in loan proceeds for the refinance of 8 Somerset Lane (the “Property”), a 77-unit multifamily community located in Edgewater, New Jersey. The Property was completed in 2021 and it is currently 100% occupied. Per the 9/01/22 rent roll, the Property has an in-place underwritten NOI of $763,531 - or a 7.6% debt yield. There is one commercial lease with a law firm that operates out of unit 100. The lease has a five-year term (2/28/2027 LXD) and has a contractual rent of $1,000 / month.
The Property benefits from a 30-year PILOT agreement whereby taxes will be set at 6.28% of the effective gross income for 30 years. The Property is subject to affordability restrictions by both the Borough of Edgewater Ordinance and Council of Affordable Housing ("COAH"), which is governed by the Uniform Housing Affordability Council Statutes. According to the statutes, the Property is required to have at least 50% of the units designated as at or below low-income units (50% AMI) and the remaining units designated as at or below moderate-income units (80% AMI). Additionally, the statutes state that the maximum rent shall be no more than 60% AMI, the average rent for low- and moderate-income units must be no more than 52% AMI, and the Sponsor must keep rents for 10% of all low- and moderate-income units at no more than 35% AMI.
The Property is currently unlevered and was constructed without any financing. The Sponsor is seeking a 10 year, fixed rate, non-principal recourse loan to refinance the property. Loan proceeds will be used to pay closing costs and return approximately $9.8MM of cash to the Sponsor.
A recently commissioned a set of third party reports are available including a property condition report, environmental site assessment, zoning report, and an appraisal completed by Cushman & Wakefield in June 2022. The appraisal firm concluded on an as-is value of $16.7MM which equates to a 60% LTV on the requested loan amount. This information, along with the latest rent roll, trailing operating statement, collections report, and other relevant deal information can be found in the data room.