Tower Capital recently arranged the acquisition financing for a 300-unit multifamily property located in Phoenix, Arizona. 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. Tower’s client, an experienced California-based, private investor, sees 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 in 2022.

San Giovanni features two sparkling swimming pools, fitness facility, business center, stand-alone clubhouse with leasing office, spacious outdoor areas with barbeque grills, assigned covered parking, controlled access, & children’s play structure. Units are 1-, 2-, & 3-bedrooms. There are fifty 1-beds, one-hundred and fifty 2-beds, and one-hundred 3-bedroom units.

The $40 million, non-recourse, bank loan provides the borrower with an extremely low interest rate based on a 30-year amortization schedule, as well as a flexible step-down prepayment structure. Additionally, Tower was able to negotiate the borrower’s ability to obtain secondary financing on the asset after an 18-month hold period, allowing their client to recoup equity to be used towards additional investment opportunities.