San Giovanni Acquisition Financing Has Many Bells and Whistles

Acquisition financing of $40 million was recently arranged for San Giovanni, a 300-unit multifamily property located in Phoenix. The 2001-vintage asset is encumbered by a Land Use Restriction Agreement that mandates 70 percent of the units must remain affordable until 2033.

The property located at 6901 W. McDowell Rd. offers 50 one-bedroom, 150 two-bedroom and 103 three-bedroom units.

Tower Capital arranged the financing.

“The Tower Capital team as well as our client recognize an opportunity to increase rents significantly on the market rate units along with taking advantage of an anticipated 7 percent allowable increase on the affordable units for next year, so we are very excited about the potential of this property,” said Adam S. Finkel, principal and co-founder of Tower Capital.

The nonrecourse loan secured by Tower provides the borrower with an extremely low 3 percent interest rate based on a 30-year amortization schedule as well as a flexible step-down prepayment structure. Additionally, Tower Capital was able to negotiate the ability to obtain secondary financing on the asset after an 18-month hold period, allowing the borrower to recoup equity to be used towards additional investment opportunities.