- Continental Properties secured $480 million from New York Life Investment Management to refinance 10 apartment properties with more than 2,700 units across seven states.
- The new debt replaces construction financing, and the properties join a 23-community, 5,700-unit fund; Continental says the refinancing should generate meaningful proceeds for investors.
- Insurance-backed capital is competing with banks, debt funds and the agencies for stabilized multifamily takeouts, giving developers more options to exit construction loans.
Continental Properties secured a $480 million multifamily refinancing from New York Life Investment Management, Commercial Observer first reported.
The loan covers 10 properties holding more than 2,700 apartments across seven Southern and Midwestern states, and Jim Cope of Walker & Dunlop brokered the deal.
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The Details
The portfolio spans seven states, including Florida, Illinois, Iowa and Tennessee. However, Continental did not identify the properties or provide addresses. NYLIM also did not disclose the loan terms.
The assets will join Continental’s Development Fund II. The fund now holds 23 communities and more than 5,700 units.
Construction Debt Out
Dan Sell, Continental’s vice president of finance, said the new debt replaces construction financing. As a result, it should generate meaningful proceeds for investors.
He added that the financing will strengthen the developer’s balance sheet. It will also allow the company to keep focusing on attainable housing in its growing markets.
Zoom Out
Insurance-backed lenders are among several capital sources pursuing multifamily takeouts. For example, our August brief on multifamily lending cited CBRE data showing bank lending rose about 30% year over year. Banks also sometimes offered rates 30 to 40 basis points below agency loans.
Meanwhile, Fannie Mae and Freddie Mac accounted for roughly 40% of placements in that data. Life companies, however, were becoming more active.
Why It Matters
Refinancing construction loans into permanent debt allows developers to return capital to investors. They can then recycle that money into new projects.
Moreover, this $480 million takeout spans seven states. It shows lenders are still willing to finance stabilized apartment communities beyond coastal gateway markets.
