MULTIFAMILY REFINANCE LOAN – PHOENIX, AZ

• Capital Source: Debt Fund / Life Company
• Loan Amount: $59,000,000 (Earn Out to $61,500,000)
• Purpose: Permanent Refinance Loan
• LTV: 70%
• Rate: 3.50% 10Yr Fixed Term
• Amortization: Five years interest only followed by five years 30 year amortization
• Recourse: Non-Recourse

Transaction Details:

Tower Capital recently arranged the refinance for a class-A apartment community located in Goodyear, Arizona.  The borrower was in the middle of a floating rate bridge loan and wanted to take advantage of today’s low rate environment by locking in a low fixed rate for the next 10 years.

In order to secure the most aggressive terms in the marketplace, Tower ran a competitive bidding process using a broad scope of capital relationships, including the agencies, banks, debt funds, life insurance companies, and private equity groups.

Although the property was operating over 96% occupancy, there was quite a bit of loss to lease to burn off to achieve its full potential.  The borrowers were on track to accomplish this after acquiring the asset at end of 2019, but then the pandemic slowed the progress. Tower worked closely with the borrower’s property management team to analyze the rent rolls on a weekly basis, and find a lender that was able to underwrite off the latest rent roll, instead of a T-3 profit and loss statement.  The end result was Tower was able to structure a permeant loan that provided almost 10% higher proceeds than agency, and almost 20% higher proceeds than a typical life company lender.  As an added bonus, this lender will allow the borrower to earn out an additional $2,500,000 as they increase the income of the property in the coming years.