Financing Amount:
Acquisition + Renovation Financing
Tempe, Arizona
Capital Source:
Debt Fund + Private Capital
Transaction Details:

Tower Capital recently arranged a non-recourse senior loan, with additional preferred equity secondary financing, for the acquisition and renovation/conversion of a 160-key independent hotel located in Tempe, Arizona. The property is comprised of seven, two-story buildings that sit on the south side of Baseline Road. The property features a reception area, banquet hall, tennis courts, and an outdoor pool. Built in 1982 and operated as an independent hotel by the same investor group for almost 40 years, the property was ripe for repositioning going into the COVID19 pandemic.

The borrower, an experienced local sponsor, plans to reduce the unit count to comply with existing zoning regulations for multifamily use in the area. The new unit mix will consist of 36 studios, 91 one-bedroom units, and 14 two-bedroom units, for a total of 141 multifamily units. Roughly $3 million is anticipated towards hard and soft development costs to complete the business plan, which is forecasted for stabilization in year 3.

Capital Structure

Tower Capital was able to secure a non-recourse senior loan at a competitive interest-only rate for $11,450,000 and was able to introduce its client to an existing relationship with a Los Angeles-based private equity provider interested in the business plan. The total capitalization represents 89% of the anticipated total cost of the project.


The COVID19 pandemic created some unique challenges for this transaction from a timing and certainty standpoint. The borrower initially presented this project to Tower in February and was able to negotiate a long escrow period as COVID took hold. During this time, many bridge lenders were sitting on the sidelines waiting for a clearer picture of how market conditions would evolve. The team at Tower was able to complete a comprehensive package outlining the borrower’s business plan, highlighting their experience, and demonstrating achievable take-out financing.

recent transactions


15333 N. Pima Road
Suite 375
Scottsdale, AZ 85260
AZ CMB-0928926


2626 Cole Ave
Suite 300
Dallas, TX 75204

Los Angeles

1801 Century Park East
24th & 25th Floors
Los Angeles, CA 90067
CA DRE-02237859
Copyright © 2024 All Rights Reserved Tower Capital | Website Developed by Connect Creative
linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram