Tower Capital has arranged a $1,515,00 acquisition bridge loan to reposition a 10-unit, C-class, multifamily property in northern Arizona. The loan represents 80% of total project cost at a competitive 7.5% fixed interest rate. No interest reserve was required, and the lender’s capital improvements funds go in before the borrower’s, limiting the amount of equity the sponsor had to contribute at close.

The community is located in a dynamic neighborhood in downtown Flagstaff which is a regional tourist destination for those looking to flee the Phoenix/Tucson heat in the summertime, and get a taste of snowy weather in winter.

The property had been under the same private ownership for many years and provided Tower’s client with a value-add opportunity to renovate and raise rents. The plan is to complete exterior renovations, including new paint and landscaping upgrades, soon after acquiring the asset, and then to spend approximately $25k per unit for interior renovations as the leases roll. The repositioning of the asset is expected to increase rental income by an additional sixty percent. Upon stabilization, the borrower plans to refinance and hold the property long term.