Tower Capital arranged nearly $6.5 million in financing for three multifamily properties in Phoenix Metro. The communities include Casa Monte Vista in South Phoenix, Capri in Scottsdale, and Palmetto Cottages in Phoenix.
“Tower Capital continues to see a wide range of lenders seeking to place capital in multifamily assets across the Phoenix Metro market,” said Tower Capital co-founder Adam Finkel, CCIM. “Banks as well as agency lenders recognize the market is experiencing robust growth, which is creating compelling opportunities and is expected to fuel future demand.”
The first transaction involved Tower Capital arranging $3,092,000 in financing for Casa Monte Vista, a 45-unit, low-rise, two-story apartment community located in South Phoenix. The property was built in 1985 and sits on 1.66 acres at 120 W. Dobbins Road. The community features an outdoor swimming pool, leasing office, on-site laundry facility, and a barbeque area. The property has 44 large 800-square-foot, two-bedroom, one-bath units, and one 500- square-foot one-bedroom unit. Units are individually metered for electricity. The property was 98% occupied, according to the selling broker. The 20-year, non-recourse, Freddie Mac loan offers the borrower a low rate of 3.58% fixed for 10 years, followed by a floating rate period with an open prepay.
“Due to the COVID pandemic, the small balance Freddie Mac program has been especially conservative,” said Tower Capital’s Scott Nielson, Vice President. “The advisors at Tower Capital worked with our client to formulate a strategic plan that allowed Freddie Mac to get comfortable approving funding for Casa Monte Vista.”
The second financing involved Tower Capital arranging $2,300,000 in financing for Capri, a recently renovated, 13-unit, low-rise, two-story apartment community nestled in the heart of downtown Scottsdale at 6847 E. 4th St.
Originally built in 1959, the mid-century modern architecture and recently renovated Class A 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 for Capri provides the borrower with a low 3.4% rate which is fixed for five years, at which point the borrower has the option to refix the rate, remain floating, or pay off the loan with no penalty,” notes Finkel.
In the third deal, Tower Capital secured $1,082,000 in financing for a California client completing a 1031 exchange. The borrower acquired Palmetto Cottages, an 11-unit multifamily property at 1138 E. Devonshire Ave. in Phoenix. The mid-century, single story complex went through a heavy renovation in 2019 that included full interior and exterior rehab. The loan Tower secured was a 10-year fixed term, amortized over 25 years at 3.92% with a step down prepay.
“Our client had three main objectives with this Palmetto Cottages refinance transaction, certainty of close within 65 days, prepayment flexibility, and an interest rate under 4%,” said Nielson. “Tower Capital engaged multiple local and regional banks and was able to achieve every objective.”
Tower Capital successfully closed more than $400 million in financing transactions in 2020. The commercial real estate lending activity encompassed the acquisition and refinancing of more than 3,200 multifamily units, development capital for 639 single-family build-to-rent units, and senior debt for 760,000 square feet of retail space.
The financing activity in 2020 pushed Tower Capital’s total loan activity to more than $1.2 billion since the independent structured finance firm’s inception in 2015. The company participated in a wide array of debt and equity placements across asset classes including multifamily, single-family rentals, retail, and hotel.
