Apollo Commercial Real Estate Finance completes USD130m loan transaction
Apollo Commercial Real Estate Finance (ARI) has closed a commercial real estate loan transaction totalling USD130 million, bringing year-to-date total capital commitment and deployment to approximately USD879 million.
ARI has also received USD34.5 million from the repayment of a first mortgage loan secured by a multifamily property in Brooklyn, New York.
ARI closed a USD130 million junior mezzanine loan secured by the equity interests in a portfolio of 155 healthcare properties representing 18,662 licensed beds across 20 states.
The mezzanine loan is part of a USD1.05 billion whole loan which consists of a USD710.0 million first mortgage loan, a USD165.0 million senior mezzanine loan provided by investment funds managed by subsidiaries of Apollo Global Management and a USD175 million junior mezzanine loan, which includes ARI’s USD130.0 million loan and USD45.0 million of pari passu junior mezzanine loans provided by investment funds managed by Apollo.
The whole loan is being used to refinance existing debt on the portfolio, which includes a USD39.0 million mezzanine loan provided by ARI in 2014, which was repaid.
The floating rate junior mezzanine loan has a two-year initial term with three two-year extension options and an appraised loan-to-value of approximately 62 per cent. The junior mezzanine loan has been underwritten to generate an internal rate of return (IRR) of approximately 12 per cent.
Scott Weiner, chief investment officer of ARI’s manager, says: “This transaction demonstrates ARI’s commitment to provide the company’s borrowers with creative capital solutions. For this transaction, ARI worked with an existing borrower to tailor the loan for their specific financing needs, while at the same time generating an attractive, risk-adjusted return for ARI.”