Tower Capital arranged $28 million in acquisition financing for a 276-unit, garden-style apartment community in Glendale, Arizona.
The property features top-of-the-line amenities including a resident clubhouse, two large pools, a fitness facility, and dedicated covered parking.
“Tower Capital seeks to connect capital with sponsors who have proven track records for operating and revitalizing value-add assets in markets that are experiencing strong fundamentals, like Metro Phoenix,” said Adam S. Finkel, CCIM, Principal and Co-Founder of Phoenix-based Tower Capital. “The borrower brings considerable management expertise, having owned similar large Class B/C multifamily projects both locally and nationally. Additionally, upon the expiration of the Land Use and Restriction Covenants Agreement (LURA), there is a significant value-add opportunity to raise in-place, below-market rates up to fair market value.”
The borrower purchased the property in an off-market transaction and plans to deploy capital on improvements to the exterior of the property and the common areas. The borrower’s goal is to strengthen the property’s curb appeal and overall image. The property is comprised of 28 one bedroom/one-bathroom units, 208 two bedrooms/two-bathroom units, and 40 three bedrooms/three-bathroom units, with an average unit size of approximately 858 square feet.
Additionally, a significant portion of the units are designated as affordable and will be subject to the Declaration of Affirmative Land Use and Restriction Covenants Agreement (LURA). As the LURA ticks down, the owner plans to make accretive improvements to the interior units with the objective of elevating the in-place rents for the majority of the units.
Tower Capital provided a 10-year permanent acquisition loan with a fixed interest rate for five years and one year of interest only payments starting at 3.375% based upon an approximately 63% loan-to-value.
“Tower Capital successfully sourced 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,” added Finkel.