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Hunt Mortgage Hitting Market with First Securitized Offering

GSE Multifamily Lender Rolls Up Non-Agency Loans into a New Notes Offering
August 3, 2017
Hunt Mortgage Group, one of the largest Freddie Mac and Fannie Mae multifamily loan originators, is taking a new step into the commercial real estate loan securitization arena.

The El Paso-based subsidiary of Hunt Cos. is getting set to offer its debut securitized offering, Hunt CRE 2017-FL1, a managed cash flow commercial real estate collateralized loan obligation (CLO).

Hunt Mortgage Group launched its CLO platform in the fall of 2015 with the goal of growing its non-agency lending as part of a long-term plan to get into the securitization business.

The issued notes will be backed by 23 floating rate loans and their related 36 mortgaged properties with a loan balance of $279.38 million. The majority of the loans are secured by multifamily properties. Four loans, representing 12.2% of the initial pool balance, are secured by commercial and specialty properties.

Hunt Mortgage Group originated all the loans in the offering. The firm does more than $2 billion a year in GSE multifamily lending, according to DBRS, one of the bond agencies rating the offering.

Hunt will retain 16.75% of the transaction balance, and Hunt Servicing Co. will act as special servicer. Hunt affiliates currently service a loan portfolio totaling about $12.5 billion.

Hunt Investment Management, the collateral manager, will direct the selection, acquisition and disposition of collateral during the transaction's 2.5-year re-investment period. The four largest loans in the bond deal are:

  • Strategic Texas Portfolio ($33.8 million). The portfolio comprises five multifamily properties constructed between 1971 and 1983 in smaller Texas cities (Abilene, Temple, Beaumont and Brownsville). The portfolio was purchased by Strategic Realty Capital as part of a larger 22-property acquisition completed in June 2014.

  • Park Square West Apts. in Stamford, CT ($428.1 million). The Class B 143-unit high-rise apartment complex was constructed in 1999. The property was acquired by UC Funds in September 2016 as part of a bankruptcy auction for a purchase price of $40 million ($279,720 per unit).

  • Tampa 652 Portfolio ($26.8 million). The collateral comprises four Class B apartment complexes in suburban Tampa with a combined 652 units: Puritan Place Apts., Laurel Chase Apts., Rivertree Landing and Palm River Apts. The Focus Group Co. acquired the portfolio in September 2016 for $30 million or about $46,050/unit.

  • Brookhaven Portfolio ($23.5 million). The portfolio represents two apartment communities, comprising a total of 344 units (Terraces at Brookhaven with 244 units and Northeast Plaza Apts. with 100) both in Brookhaven, GA.

    The debut CLO offering from Hunt is expected to close Aug. 15.

    Hunt is the second GSE multifamily lender to jump into the securitization business this year. Greystone, a New York-based multifamily and health care finance firm, rolled out its first loan securitization offering in March.


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