Six months after wrapping up work on its newly built Palm Beach Gardens rental community, developer Housing Group scored a $75 million loan to pay off its construction loan and buy out its joint venture partner.
The debt covers Quaye at Palm Beach Gardens, a 340-unit apartment and townhome community at 10000 South Garden Drive that was completed in May.
NorthMarq Capital, which originated the loan under its Fannie Mae platform, announced Housing Group’s financing deal Wednesday.
The financial firm’s Senior Vice President Melissa Marcolini Quinn told The Real Deal that Housing Group plans to use the funds as long-term debt. The loan has a 10-year term and a floating interest rate, she said, which gives Housing Group flexibility in case the developer wants to sell.
“They plan to hold the property, but it’s one of those situations where if they received an offer on the property, they wouldn’t want to be locked into a huge yield maintenance,” she said.
Housing Group’s new loan also allows the company to pay off its $47.6 million construction financing from Synovus Bank, as well as buy out the project’s institutional investor Crossharbor Capital Partners.
If Housing Group did decide to sell its newly built project, the developer might not have to wait long.
Rental communities are big business in South Florida, with $4 billion worth of apartment and townhome complexes trading during this year’s first half alone. Quaye is also mostly occupied with a vacancy rate of just below 8 percent, along with an average asking rent of $2,031 per unit.