Tower Capital recently arranged the financing for a 224-unit, low-rise, 2-story apartment community located in the Phoenix I-17 Employment Corridor. The property was built in 1980 and sits on 8.09 acres. The community features an outdoor swimming pool, leasing office, clubhouse, two on-site laundry facilities, basketball court, community playground, dog park and a picnic area with propane gas barbecue grilling stations.  The seller had renovated 32% of the units in the past couple years leaving a clear path for increasing the value for our client.

The 7-year floating rate, non-recourse, Freddie Mac loan offers the borrower a low starting rate and then adjusts monthly over the 30 Day SOFR.  With 2 years of interest only payments and only a 1 point pre-pay penalty, this gives the borrower plenty of time to increase the value of the property, and then sell or refinance into a fixed rate loan without paying a large pre-pay penalty.

Due to the COVID pandemic and uncertainty in collections, one of the main challenges was keeping the loan proceeds at the same amount as the loan app 2 months ago.  With Tower’s strong relationships with its lenders and detailed underwriting experience, Tower delivered the result the borrower was aiming for.