Berkadia recently originated a $14.1 million loan for Westward Ho Apartments, a nationally registered historic landmark property located in downtown Phoenix. The property, a former 600-unit luxury hotel, was originally purchased and converted to 289 housing units for elderly and disabled residents in 1978 by Gaudreau Development Company, an affiliate of the current owner and developer, Cathedral Development Group, Inc. of Providence, Rhode Island. The original “Tower” building was constructed as one of the first luxury hotel resorts in the desert region in 1928 with later annex additions constructed in 1948 (the J-Wing Building, a Del Webb design) and 1951 (the Thunderbird Room). Managing Director Richard Price of the Bethesda, Maryland office secured the fixed rate construction and permanent financing through Berkadia’s HUD/FHA Section 221 (d)(4) Program. The loan was processed under HUD’s expedited Tax Credit Pilot Program.
The borrower, Rhode Island-based affordable housing developer Cathedral Development Group, Inc. through its Central & Fillmore Associates, LP entity, will use the loan proceeds, combined with a nearly equal amount of Low Income Housing and Historic Tax Credit equity investments, to pay down a portion of existing subordinate debt on the property and to finance construction and substantial property upgrades. Loan terms include a fully amortizing 36-year repayment schedule.
“The high level of professionalism provided by Berkadia, as well as the full cooperation and extraordinary effort of both the Phoenix and San Francisco HUD offices made it possible to close this complex transaction under considerable time pressures,” said Robert Gaudreau Jr., President of Cathedral Development Group, Inc. “We are grateful for their efforts and partnership to close this transaction.”
Westward Ho Apartments is located at 618 North Central Avenue in the heart of downtown Phoenix. The 289-unit property consists of studio, one- and two-bedroom floor plans. Community amenities include a pool, community room, library and video room, and multiple laundry facilities. The property is approximately five miles from Sky Harbor International Airport and is within a quarter of a mile of the nearest Metro Valley Light Rail system stop, providing residents easy access to many of the city’s business, cultural and sports complexes.
“This was an extremely complex transaction involving an iconic, historic property that will now be preserved for decades to come and provide quality, affordable housing to hundreds of low income residents,” Price said.”The loan was processed and closed in just 90 days to meet certain deadlines thanks to the tremendous support of HUD professionals in both Phoenix and San Francisco offices. Berkadia’s focus on client services and an outstanding development and underwriting team allowed us to deliver quality service in record time.”