Financing Amount:
Glendale, AZ
Capital Source:
Transaction Details:

Tower Capital recently facilitated $28,360,000 in acquisition financing for the purchase of San Remo, a 276-unit, 2-story walk-up, wood-frame and stucco, garden-style apartment community, originally constructed in 2003. The 9.5-acre site located at 5755 N 59th Ave in Glendale, AZ features a leasing office/resident clubhouse, two large pools, a fitness facility, dedicated covered parking and washer/dryer hookups in every unit. With floor plans ranging from 623 square feet to 1,036 square feet, the property is comprised of 28 one bedroom/one bathroom units, 208 two bedroom/two bathroom units and 40 three bedroom/three bathroom units, with an average weighted unit size of approximately 858 square feet. A significant portion of the units are designated as affordable and subject to Declaration of Affirmative Land Use and Restriction Covenants Agreement (LURA). Upon the expiration of the LURA, there is significant value-add opportunity to raise in-place below-market rates up to fair market value. 

The borrower, who purchased the property in an off-market transaction, intends to capitalize on operational efficiencies through their considerable management expertise of owning similar large Class B/C multifamily projects both locally and nationally. Additionally, the borrower plans to deploy capital over the tenure of their ownership to make targeted improvements to the exterior of the property, as well as within the common areas with the goal of strengthening the property’s curb appeal and overall image. As the LURA ticks down, the owner also plans to make accretive improvements to the interior units in advance of the LURA expiration so that the borrower will be able to elevate the in-place rents for the majority of the units. 

The 10-year permanent acquisition loan provided the borrower with a fixed interest rate for 5-years and 1-year of interest only payments starting at 3.375% based upon approximately 63% loan-to-value. 

Tower Capital was able to successfully source the acquisition financing on behalf of the borrower within a short timeframe and generated an extremely competitive lending environment with nearly 10 lenders quoting the opportunity, which ultimately delivered the best pricing and terms for the borrower to meet their investment objectives.

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