Multifamily Refinance Bridge Loan
- Capital Source: Debt Fund
- Purpose of Loan: Acquisition
- Loan Amount: $4,860,000
- LTC: 75% (Purchase and Renovation)
- Rate: 5.99%
- Term: 3 Year Fixed / 3 Year Term
- Amortization: Full Term Interest Only
- Prepayment: 12 Months Minimum Interest
- Recourse: Non-Recourse
Tower Capital recently financed a 24-unit multifamily property located in Phoenix, Arizona. The property is comprised of all 2 Bed / 2 Bath units and is well located with a centralized Phoenix location surrounded by a strong employment base. The seller had renovated a few of the units prior to the sale to show a potential buyer the rents that can be achieved. Tower’s client plans to complete the renovation plan in the next few years in order to increase the NOI and value of the property.
Bridge lending for value add properties under $10 million can be challenging these days. While floating rate bridges loans still have historically low rates, the volatility in the credit markets have caused the cost of rate caps to skyrocket recently. While a floating rate loan may start at a 2% lower rate, the cost of the rate cap itself could cost 2-4% of the loan amount for a 3-year rate cap. Tower Capital provided a hand full of options for this acquisition from recourse to non-recourse, floating to fixed rates, and bridge to perm. After reviewing the multiple options, the borrower decided to close with a non-recourse lender that offered the highest proceeds and a fixed rate for 3 years without a rate cap. The 3 years of interest only payments on a fixed rate allows the borrower to have plenty of time to renovate the property, increase the income and then refinance or sell.
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 $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.