Tower Capital recently facilitated a $4,600,000 cash-out refinance of a recently renovated, 46-unit, multifamily property located in Tucson, Arizona. The project is situated within the North University Submarket of Tucson and caters mostly to students attending the University of Arizona.

Originally built in 1965, the current ownership completed a significant renovation to the property after acquiring it in 2017, creating a resort-like environment. The property features seventeen (17) one-bedroom, twenty-eight (28) two-bedroom units, and one (1) three-bedroom unit with an average unit size of 716 square feet. Community amenities at Surf Lodge include an on-site laundry room, swimming pool, poolside tanning chairs and barbecue areas with cabana. The property features a low maintenance and water use desert landscape including palm trees, a landscaped lawn area, and flowering bushes. The interior courtyard is gated for security and adds a peaceful and lush environment for the residents.

The 7-year fixed rate loan carries an interest rate of 6.26% with a 30-year amortization schedule and step down prepay. The borrower utilized the loan proceeds to pay off their existing debt and restructure the ownership of the asset.

The high concentration of students prohibited many lenders from quoting the opportunity so the pool of options was much slimmer than a traditional multifamily property. Despite this fact, the financing was able to provide significant cash back to the borrower and achieved their objectives.