Villas West is a 285 unit condominium project, originally constructed in 1984, and is located at 4820 West Palo Verde Drive in Glendale, Arizona. Tower Capital’s client acquired 51 of the total units for $2.75 million. The buyer assumed control of the HOA at acquisition and will be installing their own property management. The buyer is a local investor with other Phoenix assets, including single family rentals, apartment buildings, and condos.

Given the smaller size of the loan and minimal percentage of the total complex being acquired, financing options for Villas West were limited. Not qualifying for an agency or CMBS execution, Tower Capital leveraged its relationship with a local bank to secure acquisition financing based upon 65% LTV and an initial 5.5% interest rate. The loan offers interest only payments for the first year, helping the borrower’s cash flow as they put new management in place and replace some of the existing tenants. In addition, a partial release clause allows the borrower to sell the units individually with no prepayment penalty.