Tower Capital arranged $40 million in acquisition financing for San Giovanni, a 300-unit multifamily property located in Phoenix.
The 2001-vintage asset is encumbered by a Land Use Restriction Agreement (LURA) that mandates 70% of the units must remain affordable until the year 2033.
San Giovanni features two sparkling swimming pools, a fitness facility, business center, stand-alone clubhouse with leasing office, spacious outdoor areas with barbecue grills, assigned covered parking, controlled access, and children’s play structure. The property, located at 6901 W. McDowell Rd., offers 50 one-bedroom, 150 two-bedroom, and 103 three-bedroom units.
“The Tower Capital team, as well as our client, recognizes an opportunity to increase rents significantly on the market rate units, along with taking advantage of an anticipated 7% allowable increase on the affordable units for next year, so we are very excited about the potential of this property,” said Adam S. Finkel, CCIM, Principal and Co-Founder of Tower Capital.
The non-recourse loan secured by Tower provides the borrower with an extremely low 3% interest rate based on a 30-year amortization schedule, as well as a flexible step-down prepayment structure. Additionally, Tower Capital was able to negotiate the borrower’s ability to obtain secondary financing on the asset after an 18-month hold period, allowing them to recoup equity to be used towards additional investment opportunities.