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Morgan Properties closes six Freddie Mac Series K “B-coins” for a total of $ 6.5 billion in loans in 2020

KING OF PRUSSIA, PA – (COMMERCIAL THREAD) – Morgan Properties, the nation’s fifth largest apartment owner and operator, is delighted to announce its continued investment in the Freddie Mac K-Series space having acquired six separate K-Series rooms in 2020 for 6.5 billion dollars in loans. The six B coins that Morgan Properties acquired had a total face value of approximately $ 500 million.

In September 2017, Morgan Properties launched its Special Situations platform where the company invests in fixed income securities, recapitalizations and other alternative investment opportunities. Morgan Properties saw a great opportunity to leverage its vertically integrated multi-family investment platform and further diversify its capital. Since launching its Special Situations platform, Morgan Properties has completed several recapitalizations of large multi-family equity portfolios as well as 15 Freddie Mac K-Series B-Pieces out of $ 15 billion in loans with a total face amount of $ 1.00. $ 1 billion.

“Although 2020 is an unprecedented year, Morgan Properties continues to be one of the nation’s most active multi-family equity and credit investors. Our continued expansion into the Freddie K space is a testament to our long-term belief in multi-family fundamentals, ”said Jason Morgan, director of Morgan Properties. “Freddie Mac and Fannie Mae have stepped up to stabilize the housing industry during a time of great uncertainty and we feel honored to play a small role as a B-Piece investor in helping to ensure a functional securitization process. We look forward to continuing to develop our special situations platform in 2021 and beyond. ”

Details of the six The Morgan Properties K Series offers closed in 2020 are as follows:

K-105: The issue is supported by a pool of 71 multi-family mortgages. At closing, the total loan balance represented by the transfer certificates was approximately $ 1.5 billion and the B coin that Morgan Properties acquired had a face value of approximately $ 110 million. The loan metrics underlying the Pass-Through Certificates included: an LTV of 67.5% at closing, which is expected to amortize up to 62.0% at maturity; and a weighted average net cash flow debt service coverage ratio of 1.49x.

KG-03: The issue is supported by a pool of 24 multi-family mortgages. At closing, the total loan balance represented by the transfer certificates was approximately $ 595 million and the B coin that Morgan Properties acquired had a face value of approximately $ 45 million. The loan metrics underlying the Pass-Through Certificates included: an LTV of 75.1% at closing, which is expected to amortize up to 66.2% at maturity; and a weighted average net cash flow debt service coverage ratio of 1.36x.

K-114: The issue is supported by a pool of 59 multi-family mortgages. At closing, the total loan balance represented by the transfer certificates was approximately $ 1.3 billion and the B coin that Morgan Properties acquired had a face value of approximately $ 98 million. The loan metrics underlying the Pass-Through Certificates included: an LTV of 68.7% at closing, which is expected to amortize up to 63.3% at maturity; and a weighted average net cash flow debt service coverage ratio of 1.64x.

KSG-1: The issue is supported by a pool of 28 multi-family mortgages. At closing, the total loan balance represented by the transfer certificates was approximately $ 579 million and the B coin that Morgan Properties acquired had a face value of approximately $ 43 million. The loan metrics underlying the Pass-Through Certificates included: a 70.6% LTV at closing, which is expected to amortize up to 63.6% at maturity; and a weighted average net cash flow debt service coverage ratio of 1.55x.

K-118: The issue is supported by a pool of 55 multi-family mortgages. At closing, the total loan balance represented by the transfer certificates was $ 1.3 billion and the B coin that Morgan Properties acquired had a face value of approximately $ 97 million. The loan metrics underlying the Pass-Through Certificates included: an LTV of 64.6% at closing, which is expected to amortize up to 59.1% at maturity; and a weighted average net cash flow debt service coverage ratio of 2.12x.

K-740: The issue is backed by a pool of 44 multi-family mortgage loans. At closing, the total loan balance represented by the transfer certificates was $ 1.3 billion and the B coin that Morgan Properties acquired had a face value of approximately $ 96 million. The loan metrics underlying the Pass-Through Certificates included: an LTV of 59.5% at closing, which is expected to amortize up to 56.8% at maturity; and a weighted average net cash flow debt service coverage ratio of 2.36x.

Freddie Mac Multifamily is one of the leading issuers of structured multifamily agency guaranteed securities. The Series K transactions are part of the company‘s business strategy to transfer part of the risk of losses to taxpayers and private investors who buy the unsecured subordinated bonds, such as the “B-Piece”. K certificates generally offer a wide range of options for investors with stable cash flow and structured credit enhancement.

About Morgan Properties

Founded in 1985 by Mitchell Morgan, Morgan Properties is a national property investment and management firm headquartered in King of Prussia, Pennsylvania. Morgan Properties and its affiliates own and manage a multi-family portfolio consisting of 307 apartment communities and over 79,649 units located in 15 states, primarily in the Mid-Atlantic and Northeast region. Morgan Properties is currently the largest owner of multi-family buildings in Pennsylvania, Maryland and New York City, as well as the fifth-largest apartment owner in the country. With approximately 2,000 employees spread across its geographic footprint, the company prides itself on its rapid decision-making ability, strong capital relationships and operational expertise. Learn more at www.morganproperties.com.

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