Success with Green Rewards for Multifamily

PNC Real Estate helps two Stratford Partners properties benefit from Fannie Mae Green Rewards Program

In an effort to incentivize owners to upgrade aging housing stock for workforce housing, Fannie Mae has enhanced its offering to stimulate investment in energy-saving improvements for multifamily properties.

One of those sponsors is Stratford Partners, a private equity real estate investment firm that acquires and develops multifamily properties. A PNC Real Estate client since 2012, Stratford Partners has been the sponsor on five multifamily loans with the bank. The firm quickly saw the benefits of the Green Rewards program.

To make it easier for Stratford to qualify, PNC Real Estate engaged an engineer to provide an audit of all the ways that the properties could become more efficient as well as an estimate of the percentage savings and cost to implement. Stratford then selected the combination of improvements that made the most sense from an economic perspective.

Under the program, the energy improvements are escrowed at closing; the borrower has 12 months to complete the work post-closing.

For Sun Ridge alone, the sponsors implemented water efficiency upgrades totaling $108,000, which will reduce the property’s water consumption by 23.9%, higher than the Fannie Mae minimum. The move will save $34,504 annually, according to the engineer’s projections. In addition, the sponsor benefits from a significantly lower interest rate.

“Robert Younkin and Garrett Meyers of PNC have consistently been on the leading edge of new Fannie and Freddie products,” notes Jesse Wilson, Managing Principal of Stratford Partners. “In a competitive environment, PNC’s ability to customize loans specific to each acquisition has been crucial to our continued growth. PNC’s understanding of the Green Rewards product, and other products like it, is helping us capitalize great acquisition opportunities and ultimately deliver above market returns to our investors.”

Sun Ridge Apartments
Date:
June 2016
Location: Santee, California
Financing Amount: $21 million
Financing Type: Fannie Mae Green Rewards
Units: 160

Oakbrook Ridge Apartments
Date:
September 2016
Location: Spring Valley, California
Financing Amount: $19.6 million
Financing Type: Fannie Mae Green Rewards
Units: 128

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