Walker & Dunlop arranges $170.5M Chase balance-sheet refinancing of Lenox Terrace

Walker & Dunlop has arranged $170.5 million of permanent financing to refinance Lenox Terrace, the 1,696-unit apartment complex at 484 Malcolm X Blvd. in Harlem, with Chase Commercial Bank providing the balance-sheet loan to The Olnick Organization, retiring the existing mortgage on a cash-neutral basis—meaning the new loan was sized to the balance it replaced rather than to proceeds the borrower could pull out.

The placement ran through the eight-person Walker & Dunlop Capital Markets Institutional Advisory team: Jonathan Schwartz, Aaron Appel, Keith Kurland, Adam Schwartz, Dustin Stolly, Sean Reimer, Michael Ianno and Cody Ela. Schwartz, a senior managing director and co-head of the group, describes Lenox Terrace as combining scale, location and operating history that would be difficult to replicate in Manhattan, and cites limited new multifamily supply in New York City as part of what makes the property valuable.

The collateral is narrower than the phrase Harlem multifamily suggests: six 16-story buildings developed in 1958 hold primarily rent-regulated residences, so the durable part of the cash flow is a regulatory regime paired with an owner that has spent decades operating inside it. A version of that argument applied to New York medical office in September, where licenses and tenant credit carried as much of the value as the square footage; rent-regulated housing is that trade with the regulation standing in for the license.

$170.5 million across 1,696 units works out to roughly $100,500 a door, a figure that reads low only because most of those doors are regulated. An August West Palm Beach apartment trade at $246,000 a door shows what an unregulated rent roll prices at in a different market. The gap between the two is not a judgment about either city; it is the regulation, printed per unit.

Chase's money is balance-sheet money, which keeps the credit in a bank's hold book instead of moving it into a securitization, and that is how the maturity wall gets rolled rather than repriced. Walker & Dunlop's own cadence says something about which intermediaries are getting the work: PWD's records show four financings since Sept. 21 totaling $442 million, including the $238 million floating-rate bridge it arranged for The Landmark South in Doral, where Torchlight Investors funded an interest-only loan on 631 units. A cash-neutral refinancing of a 1958 Harlem complex and a bridge on a South Florida tower are different trades, and a shop that places both is selling execution.

The coverage does not disclose the rate, the term or the leverage on Lenox Terrace, which for a permanent placement leaves the pricing question open; the next rent-regulated Manhattan refinancing to surface will be the comparable that answers it.