Newmark Arranges $525 Million Refinancing for Flexible Living Apartment Portfolio Operated by Sentral

Rhea-AI Summary

Newmark Group (NMRK) has arranged a landmark $525 million refinancing for a portfolio of six apartment properties operated by Sentral on behalf of ICONIQ Capital. The first-of-its-kind single-asset, single-borrower CMBS loan, provided by Deutsche Bank and Goldman Sachs, covers 1,790 units across major urban markets. 25% of the units operate under a 'flexible living' strategy, offering furnished accommodations for short- or mid-length stays.

The portfolio includes properties in Denver, Chicago, Nashville, Miami, and Austin. Sentral, established in 2019, manages over 10,000 units for ICONIQ and other institutional owners, with a track record of outperforming traditional apartment operations. This transaction represents a significant validation of the flexible living model as an institutional asset class.

Positive

• Secured substantial $525 million refinancing deal
• Portfolio outperforms traditional apartment operations
• Manages over 10,000 units across major urban markets
• Flexible living model validated as institutional asset class

Negative

• None.

First-of-its-kind single-asset, single-borrower ("SASB") transaction validates flexible apartment properties as an institutional asset class

LOS ANGELES, Dec. 11, 2024 /PRNewswire/ -- Newmark Group, Inc. (Nasdaq: NMRK) ("Newmark" or "the Company"), a leading commercial real estate advisor and service provider to large institutional investors, global corporations, and other owners and occupiers, announces the completion of a landmark $525 million refinancing on behalf of ICONIQ Capital and Sentral: a first-of-its-kind single-asset, single-borrower CMBS loan to refinance flexible apartment properties. Newmark Co-President of Debt & Structured Finance Jonathan Firestone and Vice Chairman Bill Fishel arranged the financing, which was provided by Deutsche Bank and Goldman Sachs.

The transaction is tied to a portfolio of six apartment properties totaling 1,790 units in vibrant urban markets. Sentral operates each asset in the portfolio, including approximately 25% of the units under a "flexible living" strategy in which units are fully furnished and made available for short- or mid-length stays. Terms of the financing include wide latitude for flexible management and various lengths of stay to optimize property performance. The six-building portfolio includes Sentral Union Station in Denver, Sentral Michigan Avenue in Chicago, Sentral SoBro in Nashville, Sentral Wynwood in Miami, Sentral East Austin 1614 and Sentral East Austin 1630.

"This is a milestone transaction representing a significant validation of the flexible living model as an institutional asset class," said Firestone. "ICONIQ's SASB issuance is an endorsement of its innovative approach and Sentral's track record among debt underwriters and investors, including some of the largest and most sophisticated CMBS investors in the world."

Sentral was created in 2019 to deliver flexibility to consumers and allow them to live on their own terms in high-quality multifamily assets in the most dynamic cities across the country. As the operator of the six properties included in this transaction, the company has developed a track record of strong results that have outperformed results from traditional apartment operations. Sentral now manages over 10,000 units in a third party capacity on behalf of ICONIQ and other institutional owners.

Roman Speron, President of Sentral, said, "While furnished short- and mid-term rentals are relatively new to the Class A multifamily sector, consumer demand has been strong for many years. Sentral provides a way to capture this demand, manage and optimize results for institutional apartment owners and enhance satisfaction for long-term residents too."

"ICONIQ's SASB transaction, and the pricing transparency that it provides, affirms that Sentral's flexible apartment assets are treated very similarly to traditional apartment buildings from a capital markets perspective," said Fishel. "Over time, we expect flexible apartment assets to be valued in line with traditional apartment assets given the consistent increased yield premiums the Sentral platform is able to generate relative to traditional apartments."

Gibson Dunn and Latham & Watkins also advised on the transaction.

About Sentral
Sentral is the leading Class-A multifamily property management company that drives Net Operating Income for owners through differentiated operating capabilities. The company provides full-cycle property and asset management services on over $4 billion in multifamily assets for a growing list of institutional owners, nationwide. Sentral delivers flexible living services, authentic local experiences, premium amenities, community connection for residents and guests, and a tech-enabled platform that enhances operational efficiency. Sentral is backed by world-class firms in technology, hospitality, and real estate, including ICONIQ Capital, Highgate Hotels, and Ascendant Capital Partners. The company is headquartered in San Francisco and Denver. To learn more, visit Sentral.com or follow @SentralLife.

About ICONIQ Capital
ICONIQ Capital is a global investment firm elevated by an extraordinary community. With over $80B assets under management, we seek to build resilient investment portfolios, partner with inspired entrepreneurs transforming industries, manage our clients' lives and legacies, and create uncommon opportunities across sectors and society. 

About Newmark
Newmark Group, Inc. (Nasdaq: NMRK), together with its subsidiaries ("Newmark"), is a world leader in commercial real estate, seamlessly powering every phase of the property life cycle. Newmark's comprehensive suite of services and products is uniquely tailored to each client, from owners to occupiers, investors to founders, and startups to blue-chip companies. Combining the platform's global reach with market intelligence in both established and emerging property markets, Newmark provides superior service to clients across the industry spectrum. For the twelve months ended September 30, 2024, Newmark generated revenues of approximately $2.6 billion. As of that same date, Newmark's company-owned offices, together with its business partners, operated from nearly 170 offices with more than 7,800 professionals around the world. To learn more, visit nmrk.com or follow @newmark.

Discussion of Forward-Looking Statements about Newmark
Statements in this document regarding Newmark that are not historical facts are "forward-looking statements" that involve risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements. These include statements about the Company's business, results, financial position, liquidity, and outlook, which may constitute forward-looking statements and are subject to the risk that the actual impact may differ, possibly materially, from what is currently expected. Except as required by law, Newmark undertakes no obligation to update any forward-looking statements. For a discussion of additional risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see Newmark's Securities and Exchange Commission filings, including, but not limited to, the risk factors and Special Note on Forward-Looking Information set forth in these filings and any updates to such risk factors and Special Note on Forward-Looking Information contained in subsequent reports on Form 10-K, Form 10-Q or Form 8-K.

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SOURCE Newmark Group, Inc.

FAQ

What is the value of the refinancing deal arranged by Newmark (NMRK) for Sentral's portfolio?

Newmark arranged a $525 million refinancing deal for Sentral's portfolio of six apartment properties.

How many units are included in the NMRK-arranged Sentral portfolio refinancing?

The portfolio includes 1,790 units across six properties in major urban markets.

What percentage of Sentral's units are operated under the flexible living strategy in the NMRK deal?

Approximately 25% of the units are operated under the flexible living strategy, offering furnished accommodations for short- or mid-length stays.

Which banks provided the CMBS loan in the NMRK-arranged refinancing?

Deutsche Bank and Goldman Sachs provided the CMBS loan for the refinancing.

How many total units does Sentral manage following the NMRK refinancing deal?

Sentral manages over 10,000 units in a third-party capacity for ICONIQ and other institutional owners.

Which cities are included in the Sentral portfolio refinanced through NMRK?

The portfolio includes properties in Denver, Chicago, Nashville, Miami, and Austin.