In a deal expected to preserve affordable rental housing for 2,858 families, Freddie Mac has financed the sale of 13 apartment complexes in Maryland, Pennsylvania and New Jersey, officials of the mortgage financing corporation said last week.
Morgan Berwind Partnerships of Philadelphia bought the properties for $100 million. Four are in Maryland -- two in Anne Arundel County and one each in Baltimore County and the city -- with a total of 953 apartments.
The partnership, a joint venture of Berwind Property Group, real estate investors, and First Montgomery Properties, a multifamily property owner and manager in all three states, plans to invest $3.7 million to upgrade all 13 buildings.
The partnership bought the buildings from several syndications of investors and got mortgages from lender Dorman & Wilson Inc., a wholly owned subsidiary of Legg Mason Inc.
Freddie Mac -- the Federal Home Loan Mortgage Corp. -- bought $78 million worth of the loans from Dorman & Wilson. Freddie Mac provides a flow of funds to lenders by buying mortgages and selling them as securities to investors.
The investment wasn't the largest ever for Freddie Mac, but it represented a major step in an effort to preserve aging housing stock, said Tom Watt, Freddie Mac's senior vice president for multifamily housing. All the properties are 20 to 30 years old.
"This provides decent and reasonably affordable housing for 3,000 units -- that houses a lot of people," Watt said. "There is a lot of upgrading going on with the properties, providing people of modest means decent and desirable housing."
The complexes in Maryland are:
Glen Mar Apartments, a complex of 176 garden apartments built in 1966 on Glen Mar Road in Glen Burnie, in a neighborhood primarily of single-family detached and attached dwellings and apartments. The new owner plans to make $215,000 worth of improvements and repairs to the roof, building exterior and wiring.
Glen Ridge Apartments, built in 1968 on Glen Ridge Road in Glen Burnie. The low-rise complex of 286 units operates at 96 percent occupancy in a stable community two miles east of Baltimore-Washington International Airport.
Ross Ridge Apartments, 192 garden apartments built in 1974 on Averill Road near Golden Ring Mall in Baltimore County. The owner will spend $279,687 to repair walls, replace roofs, appliances and heating and air conditioning units and upgrade the grounds.
Willowbrook Apartments, a 299-unit mid-rise complex of predominantly elderly tenants built in 1968 on Greenspring Avenue in Northwest Baltimore. The new owner plans to spend $500,000 on paving, roof, wall and elevator repairs.
Nearly all the apartments charge rents considered affordable for those earning the median family income in the Baltimore metropolitan area -- $52,400. A quarter of the apartments are deemed affordable for tenants earning 60 percent of the median, while 80 percent are affordable for those earning 80 percent of median.
Because the properties have been poorly maintained, Freddie Mac requires the borrower to spend $1.7 million for immediate upgrades, including the Maryland properties, and to keep monthly reserves for maintenance, said Michael McRoberts, Freddie Mac's southeast regional manager. Morgan Berwind has committed to an additional $2 million in upgrades.
Renovations should be complete by next summer, he said.
"There's a tremendous amount of stock built 20 or 30 years ago in need of modernization," Watt said. "These properties are well-built to begin with and in essence can be recycled."
The transaction was one of the largest ever for lender Dorman & Wilson, a 60-year-old mortgage banking firm specializing in commercial real estate finance, Chairman Ronald Poe said.
Pub Date: 12/15/96