Multifamily Acquisition Loan – Phoenix, AZ
- Capital Source: Private Bridge Lender
- Purpose of Loan: Bridge Acquisition Financing
- Loan Amount: $6,750,000
- LTC: 74%
- Rate: 10.99% Fixed
- Term: 24 Months
- Amortization: Full-term IO
- Prepayment: None
- Recourse: Recourse
Tower Capital recently arranged bridge acquisition financing for a 2-property multifamily portfolio consisting of two (2) low-rise, partially renovated, garden-style buildings. The properties are 1963 & 1979 vintage assets which have been partially renovated by the previous owner. The recent capital improvements to the property include plumbing, HVAC, exterior fencing/gates, installation of in-unit washer/dryers, new stainless streel appliances, new exterior painting, upgraded landscaping, new flooring, upgraded electrical, and more, totaling over $500,000 in capex. The unit mix consists of 26 one-bedroom and 26 two-bedroom units, with an average unit square footage of +713 SF, while also boasting incredible access (walking distance) to the bourgeoning Grand Canyon University and Interstate-17 freeway.
The property was acquired as an up-leg in the borrower’s 1031-exchange. The borrower is re-acquiring the asset from their previous ownership of the same assets just two years ago. The borrower’s intimate knowledge of how to operate the asset and capitalize on recent improvements, along with their extensive track record in going full-circle on multifamily deals in this submarket, ultimately led to Tower Capital being able to generate a competitive lending environment with many different capital sources quoting the opportunity.
Tower Capital was approached by the sponsor with just over a month prior to the close of escrow to arrange the acquisition financing and was able to quickly procure a private bridge lender who offered a fixed-rate bridge loan at maximum leverage (74% LTC), with NO prepayment penalty, in a very choppy capital markets environment. The 24-month, full-term interest-only, fixed-rate loan allows the sponsor to stabilize the property prior to seeking long-term permanent financing. Tower Capital, through a wide marketing campaign, was able to procure a lender within a critical timeframe and structure senior debt which will allow the sponsor to seamlessly implement their business plan for this asset.
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 Scottsdale, Arizona, Tower Capital provides customized structured financing to commercial real estate investors throughout the United States. The firm specializes in arranging debt and equity from $3 million to $300 million and has financed in excess of $2.3 billion for clients since inception. Tower Capital focuses on independent financial advising with an entrepreneurial mindset, market vigilance and personalized attention to every client.