PROPERTY DESCRIPTION

Grand Terrace is a Cape Cod style 156 unit apartment complex located in Long Beach, California. There are eighteen (18) three story residential buildings and a clubhouse, built in 1984 on a 2.81 acre site. The unit mix includes studios, 1x1, and 2x1.5 townhomes. Conveniently located near the beach, neighborhood shopping, parks, golf courses, an 8-mile bike path, Cal State Long Beach (CSULB), and the Metro Blue Line, Grand Terrace provides residents with the best of California living in proximity of all major highways. Units include gas burning fire place (select units), vaulted ceilings, ceiling fans, mirrored wardrobe doors, walk in closets, screened front doors, gas stove/range, dishwashers, hard wired smoke detectors with battery back-up, and rooftop views. Property amenities in the gated community include a clubhouse, heated swimming pool, spa, security patrol, emergency maintenance and eight (8) 24-hour laundry facilities.

RESULTS

Bellwether Enterprise worked with the sponsor to successfully utilize the Fannie Mae Green Rewards Program. The sponsor will be investing in water efficiency improvements over the next 24 months to qualify for the loan program which provides a reduced interest rate spread for eligible transactions. These improvements will benefit both the sponsor and the residents with cost savings to both.

Bellwether Enterprise delivered a low interest rate, 10 year fixed rate loan with full term interest only.

GREEN REWARDS

Fannie Mae’s Green Reward Program provided multiple benefits to the sponsor:

1. 36 basis point reduction in the loan interest rate

2. 1% in additional loan proceeds - Fannie Mae underwrote 50% of the total projected utility savings upfront

3. Increased NOI and property valuation due to reduced water utility expense

Over the 10-year loan period, the borrower’s cost is $54,575, which is off-set by a combined expense savings of $875,560. The payback period is less than one year, 10-year IRR is 160%, and net economic benefit is $820,985 in increased cash flow.