Northmarq arranges $50 million in financing for age-restricted multifamily property, The Preserve at Smithtown

NEW YORK (July 23, 2024) — On behalf of The Preserve at Smithtown, Northmarq’s Chuck Cotsalas and Ernest DesRochers secured financing for the 180-unit, age-restricted (55 and above) multifamily property. The property is currently under construction and approximately 50% complete. Northmarq arranged financing through a correspondent relationship with a life insurance company.

“This transaction met many of the borrower’s needs,” said Cotsalas. “The lender provided long-term fixed rate financing, which removed any further interest rate risk, market risk and materially reduced the construction coupon by 3%. Additionally, they provided $5 million working capital immediately, hastening the borrower’s income stream and stabilization and recapturing $10 million of equity.”

The insurance company provided $50 million total, which included $35 million in initial funding, $5 million in construction draws and an additional $10 million cash-out upon stabilization. The 10-year fixed rate financing was priced at 200 BPS over the U.S. 10-year Treasury, 2-years interest-only and followed by a 30-year amortization schedule. All funds were locked at closing including the $10 million of earn-out proceeds.

The Preserve at Smithtown is newly built and features 18 garden-style buildings at 297 Smithtown Blvd. in Nesconset, N.Y. Centrally located near Long Island’s East End, the boutique apartment community offers modern one- and two-bedroom apartment homes with spacious living areas, stainless steel appliances and large walk-in closets. The Preserve at Smithtown also boasts a fitness center, walking trails, a pickleball and bocce ball court, outdoor swimming pool and a pet park.