Tower Capital has secured permanent loan of $8.6 million on behalf of its client, an experienced multifamily investor, for the refinance of Villa Ventura and Twillingate apartments located in Phoenix, Arizona. Villa Ventura is a 50-unit single level apartment complex built in 1970 with private front and backyard patios, in unit washer/dryer, covered parking and full renovations. It is on a 3.36 acre site (14.89 units per acres) with 11 buildings. Twillingate is a 52-unit multifamily complex built in 1974 which has undergone a strategic renovation plan with the installation of individual HVAC systems. It is on a 1.88 acre site (27.66 units per acre) with four buildings. Not only is this property affordable relative to market rental comps, but it offers tenants a pool, sprawling courtyard, and private patios/balconies. The borrower purchased the two adjacent properties in January 2018 and has since completed over $2 million in capital improvements which includes a major exterior facelift and rebrand, along with replacement of appliances, flooring and paint in many units. Major plumbing and electrical renovations were also performed.

The challenge with the transactions was that the properties were not completely stabilized from the renovations and were still in lease-up, however, the borrower was eager to refinance out of their high interest bridge acquisition loan. Tower Capital was able to persuade the lender to engage the borrower earlier than usual by adding some additional credit enhancement to make them comfortable and also convinced them to get more aggressive than usual with their underwriting, given the positive leasing trends. The non-recourse loan provides the borrower with a low market interest rate and enough loan proceeds to pay of their existing debt, recoup costs for the recent capital improvements, and also provide some cash for ongoing capex.