Multifamily Cash-Out Refinance

  • Capital Source: Freddie Mac
  • Purpose of Loan: Cash-Out Refinance
  • Loan Amount: $3,597,000
  • LTV: 43%
  • Rate: 5.95%
  • Term: 5 Years
  • Amortization: Full Term Interest Only
  • Prepayment: 32111
  • Recourse: Non-Recourse

Project Details:

Tower Capital recently refinance a 52-unit garden style apartment community located in the Papago submarket of central Phoenix. Built in 1981, the unit mix consists of 75% one-bedroom units and 25% studios. Renovations have been made in recent years by Tower’s client, an experienced multifamily investor, including new modern plank flooring, modern hard surface countertops, white shaker cabinets, stainless steel appliances, modern goose-neck faucets, new bathroom vanities, faucets, fixtures, low flow toilets, lighting, ceiling fans, and two-tone paint. Given the age of the construction, the plumbing and electric are built to modern standards. This includes copper plumbing supply, ABS Sewer lines and 100-amp electric panels. The property is individually metered and consists of spacious floor plans with a portion of the one-bedroom units having private patios that are in high demand. The community has an attractive courtyard and pool along with a barbecue and picnic area for residents to enjoy. The property also offers covered parking, a laundry facility, and a leasing office.

The property is located just minutes away from one of the hottest neighborhoods in Metro Phoenix, Arcadia Lite. The location is very central to many other popular locations, including the north Tempe job center with a few million square feet of office and tens of thousands of employees, Arizona State University and iconic Mill Avenue, Sky Harbor Int’l Airport, and downtown Phoenix. Neighborhood hotspots include La Grande Orange, Postino’s, The Vig Arcadia, The Porch, OHSO, Hillstone, Tarbell’s, Zipp’s, Buck & Rider, Chestnut, Flower Child and Pita Jungle. All a short walk or bike ride away.

Loan Structure:

The five-year, fixed rate loan secured through the Freddie Mac Small Balance Loan Program provides the borrower with a rate of 5.95% based upon a 30-year amortization schedule. Given that the loan was sub-55% loan to value (LTV), the borrower was able to obtain interest only payments for all 60 months of the loan term. Additionally, the borrower elected to choose the 32111 prepayment structure, giving them additional flexibility should they wish to sell the asset in a more opportune environment. The financing is non-recourse and assumable.

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 investors throughout the United States. We specialize in debt and equity placement ranging from $3 Million to $300 Million and have financed over $2.5 Billion for our clients since inception. We focus on independent financial advising with an entrepreneurial mindset, market vigilance and personalized attention to every client.