Tower Capital recently arranged the financing for a recently renovated, 13-unit, low-rise, 2-story apartment community nestled in the heart of downtown Scottsdale. Originally built in 1959, the mid-century modern architecture and recently renovated A-class unit interiors, provide tenants with a trendy and affordable option for living in a highly desirable area. Each unit enjoys walkout balconies and patios overlooking the community swimming pool and views of Camelback Mountain.

The 30-year bank loan provides the borrower with a low 3.4% rate which is fixed for 5 years, at which point the borrower has the option to refix the rate, remain floating, or pay off the loan with no penalty.

Challenges:

Given the strength of the local market, many properties are going under contract prior to complete stabilization. This can cause complications towards the end of the financing process if the seller does not execute their lease-up plan. Tower was able to find a bank willing to offer terms based upon a stable property, utilizing the most current rent roll, and verifying collected rents just prior to close. Much time was spent with the appraiser and lender to ensure sufficient underwriting to support the loan amount offered on the original term sheet.