Financing Amount:
$6,000,000
Purpose:
Cash-Out Refinance
Location:
Phoenix, AZ
Capital Source:
Bank
Transaction Details:

Tower Capital recently arranged a $6,000,000 loan to refinance a 62-unit multifamily property located in Phoenix, Arizona. The 10-year loan term provides the borrower with a 4.75% rate, fixed for the first five years, and then adjusts semi-annually based upon the 6-Month SOFR index plus 3.25%. The loan also contains a borrower-friendly stepdown prepayment structure to offer some flexibility for a future disposition of the asset. The loan proceeds were used to pay off the existing acquisition loan of $3.5 million, recoup roughly $1.5 million spent on capital improvements, and provide cash back to the borrower for future investment opportunities.

The property, located south of Camelback Mountain, is close to an abundant mix of restaurants, retail, and daily-need amenities and provides residents with plentiful opportunities to visit nearby neighborhoods such as Old Town Scottsdale, Downtown Phoenix, Biltmore, and Downtown Tempe. The unit mix consists of 32 studios, 28 one-bedroom units, and 2 two-bedroom units. Current ownership has made significant improvements since acquiring the property in June 2019, including replacement of major HVAC, mechanical, and plumbing systems, along with completely renovating most of the unit interiors.

Tower Capital was able to successfully source the financing on behalf of the borrower in an extremely critical timeframe due to the Federal Reserve raising rates in a dramatic fashion during the closing period for the loan.  Additional economic uncertainty has caused many lenders to become more conservative on cash out refinances so it was critical for the Tower Capital team to demonstrate the value creation during the borrower’s ownership tenure. Tower Capital was able to generate a competitive lending environment which ultimately delivered the best pricing and terms for the borrower based upon their investment objectives for this particular asset.

recent transactions

Scottsdale

15333 N. Pima Road
Suite 375
Scottsdale, AZ 85260
480-426-0560
AZ CMB-0928926

Dallas

2626 Cole Ave
Suite 300
Dallas, TX 75204
214-661-7633

Los Angeles

1801 Century Park East
24th & 25th Floors
Los Angeles, CA 90067
323-923-6032
CA DRE-02237859
Copyright © 2024 All Rights Reserved Tower Capital | Website Developed by Connect Creative
linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram