Affordable Housing Acquisition Financing
- Capital Source: Bank
- Purpose of Loan: Acquisition Loan
- Loan Amount: $40,000,000
- LTV: 62%
- Rate: 3.00%
- Term: 10 Years
- Amortization: 30 Years
- Prepayment: Stepdown
- Recourse: Non-Recourse
Tower Capital recently arranged the acquisition financing for a 300-unit multifamily property located in Phoenix, Arizona. The 2001-vintage asset is encumbered by a Land Use Restriction Agreement (LURA) that mandates 70% of the units must remain affordable until the year 2033. Tower’s client, an experienced California-based, private investor, sees an opportunity to increase rents significantly on the market rate units, along with taking advantage of an anticipated 7% allowable increase on the affordable units in 2022.
San Giovanni features two sparkling swimming pools, fitness facility, business center, stand-alone clubhouse with leasing office, spacious outdoor areas with barbeque grills, assigned covered parking, controlled access, & children’s play structure. Units are 1-, 2-, & 3-bedrooms. There are fifty 1-beds, one-hundred and fifty 2-beds, and one-hundred 3-bedroom units.
The $40 million, non-recourse, bank loan provides the borrower with an extremely low interest rate based on a 30-year amortization schedule, as well as a flexible step-down prepayment structure. Additionally, Tower was able to negotiate the borrower’s ability to obtain secondary financing on the asset after an 18-month hold period, allowing their client to recoup equity to be used towards additional investment opportunities.
About Tower Capital:
Tower Capital was founded to enable owners of commercial real estate to achieve their investment goals with the least amount of time, energy, and cost, while creating surety of execution and peace of mind.
Established in 2015 and headquartered in Phoenix, Arizona, Tower Capital provides customized structured financing to investors throughout the United States. We specialize in debt and equity placement ranging from $3 Million to $300 Million and have financed over $2 Billion for our clients since inception. We focus on independent financial advising with an entrepreneurial mindset, market vigilance and personalized attention to every client.