Multifamily Acquisition Loan – Phoenix, AZ
- Capital Source: Freddie Mac
- Purpose of Loan: Acquisition Financing
- Loan Amount: $24,845,000
- LTV: 71%
- Rate: Floating over 30 Day SOFR
- Term: 7 Years Floating
- Amortization: 2 Years IO, followed by 30 Year Am
- Prepayment: 1 Year Lockout – 1% for Remaining Term
- Recourse: Non-Recourse
Tower Capital recently arranged the financing for a 224-unit, low-rise, 2-story apartment community located in the Phoenix I-17 Employment Corridor. The property was built in 1980 and sits on 8.09 acres. The community features an outdoor swimming pool, leasing office, clubhouse, two on-site laundry facilities, basketball court, community playground, dog park and a picnic area with propane gas barbecue grilling stations. The seller had renovated 32% of the units in the past couple years leaving a clear path for increasing the value for our client.
The 7-year floating rate, non-recourse, Freddie Mac loan offers the borrower a low starting rate and then adjusts monthly over the 30 Day SOFR. With 2 years of interest only payments and only a 1 point pre-pay penalty, this gives the borrower plenty of time to increase the value of the property, and then sell or refinance into a fixed rate loan without paying a large pre-pay penalty.
Due to the COVID pandemic and uncertainty in collections, one of the main challenges was keeping the loan proceeds at the same amount as the loan app 2 months ago. With Tower’s strong relationships with its lenders and detailed underwriting experience, Tower delivered the result the borrower was aiming for.
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 $2 Million to $300 Million and have financed over $1.2 Billion for our clients since inception. We focus on independent financial advising with an entrepreneurial mindset, market vigilance and personalized attention to every client.