Apartment Acquisition

  • Capital Source: Credit Union
  • Purpose of Loan: Acquisition
  • Total Funding: $4,486,000
  • LTV: 72.8%
  • Rate: 3.50%
  • Term: 5 Years
  • Amortization: 30 Years
  • Prepayment: Stepdown
  • Recourse: Recourse

Transaction Details:

Tower Capital recently facilitated a $4,486,000 acquisition loan for the purchase of a 56-unit, low-rise multifamily property branded Shadow Palms in Glendale, AZ. The property is highlighted by open outdoor common areas, covered tenant parking and its close proximity to the retail, dining and entertainment amenities along the Bethany Home Rd corridor. The property is also conveniently situated exactly one mile from the US-60 freeway which provides direct access to the rest of the Valley. With an average unit size of 750 square feet, the property features 23 one bedroom/one bathroom floorplans with the remaining 23 units built out as two bedroom/one bathroom floorplans. The entirety of the units feature high-speed internet access and upgraded tile flooring in the living rooms. At the time of purchase, the property was 100% occupied.

The borrower, who purchased the property in an off-market transaction, intends to capitalize on the strong in-place occupancy and rental rate appreciation for similar multifamily properties in the area to perform accretive improvements to the property utilizing the healthy cash flow from operations to deploy back into the asset. The borrower has plans to upgrade the interior units naturally as existing leases roll and will be able to do so efficiently and effectively without significantly impacting occupancy due to being able to capture economies of scale with their other multifamily properties in close proximity. In addition to the borrower’s proposed capital expenditure items, consistent and robust rental rate growth for multifamily assets similar to Shadow Palms will also allow the borrower to bring existing rents to market. The borrower also plans to take advantage of operational efficiencies through their significant management expertise for like-kind multifamily properties in the immediate area.

The 5-year conventional loan provided the borrower with a long-term, fixed rate of 3.50% based upon 72.8% loan-to-value. The low interest, fixed rate loan will allow for the borrower to make steady improvements to the property over time utilizing the cash flow from operations.

Tower Capital was able to successfully source the acquisition financing on behalf of the borrower within a critical timeframe. Tower generated a competitive lending environment with nearly 10 lenders quoting the opportunity, which ultimately delivered the best pricing and terms for the borrower.

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 $1.3 Billion for our clients since inception. We focus on independent financial advising with an entrepreneurial mindset, market vigilance and personalized attention to every client.