Inland Residential Properties Trust Inc., a publicly registered non-traded real estate investment trust, entered into an agreement to purchase The Haven at Market Square, a 206-unit multifamily community in Frederick, Maryland, for approximately $45.8 million in cash, plus closing costs.
The Haven is located in the Market Square, a mixed-use community with retail and shopping less than an hour from Washington, D.C. and Baltimore. The 194,732-square-foot property is comprised of one-, two- and three-bedroom residences with screened in balconies and patios, washers and dryers, and walk-in closets. Community amenities include a resort-style pool, grilling area, jogging trails, internet café, business center, game room, and a gastropub with pool tables. Constructed in 2014, The Haven is 92.5 percent occupied and is a National Association of Home Builders Research Center Green Certified community.
If acquired, Inland Residential intends to fund the purchase with a one-year mortgage loan secured by the property which would require monthly interest payments at a fixed rate equal to 3.95 percent. A portion of the mortgage loan, approximately $9.2 million, would be unconditionally guaranteed for payment and performance by Inland Real Estate Investment Corporation, the REIT’s sponsor. The company intends to pay their business manager an acquisition fee equal to 1.5 percent of the contract purchase price, or approximately $0.7 million.
The mortgage loan could be prepaid in full or in part, at any time, and would not be subject to any pre-payment premium. Provided no principal payments were made during the term of the loan, approximately $45.8 million would be due and payable at the maturity date. Upon maturity or at the company’s request, the lender would provide a new seven-year non-recourse mortgage loan, provided the loan-to-value does not exceed 60 percent.
The new mortgage loan would require monthly payments of interest only during years one through five and monthly payments of principal and interest based upon a 30-year amortization schedule during years six and seven. The new mortgage loan would bear interest at a fixed rate equal to 3.79 percent. However, there can be no assurance the company will obtain a loan on these specific terms.
Inland Residential Properties Trust Inc. is a publicly registered non-traded real estate investment trust, sponsored by Inland Real Estate Investment Corporation, and intends to acquire a portfolio of geographically diverse Class A and B multifamily properties in the top 100 metropolitan statistical areas throughout the United States.