Multifamily Financing of $28M Due to Track Record of Borrower

Acquisition financing of $28 million was recently obtained for a 276-unit garden-style apartment community in Glendale. Tower Capital arranged a 10-year permanent acquisition loan with a fixed interest rate for five years and one year of interest-only payments starting at 3.375 percent based on an approximately 63 percent loan-to-value.

“Tower Capital seeks to connect capital with sponsors who have proven track records for operating and revitalizing value-add assets in markets that are experiencing strong fundamentals like metro Phoenix,” said Adam S. Finkel, principal and co-founder of Phoenix-based Tower Capital. “The borrower brings considerable management expertise, having owned similar large class-B/C multifamily projects, both locally and nationally. Additionally, upon the expiration of the Land Use and Restriction Covenants Agreement (LURA), there is a significant value-add opportunity to raise in-place below-market rates up to fair market value.”

The borrower purchased the property in an off-market transaction and plans to deploy capital for exterior and common area improvements with the goal of enhancing the property’s curb appeal and overall image. The property is comprised of 28 one bedroom/one-bathroom units, 208 two bedrooms/two-bathroom units and 40 three bedrooms/three-bathroom units with an average unit size of approximately 858 square feet.

Additionally, a significant portion of the units are designated as affordable and will be subject to LURA. As the LURA ticks down, the owner plans to make accretive improvements to the interior units with the objective of elevating the in-place rents for the majority of the units.