Capital One has announced that it has provided an $11.9 million Freddie Mac fixed-rate loan to refinance Catalina Village, a 376-space, all-age manufactured housing community (MHC) in Phoenix, Arizona. Damon Reed, Senior Vice President and Capital One’s Director of MHC Finance, originated the transaction. The key principal is a repeat customer of both Capital One and Reed. The proceeds of this loan allowed the borrower to retire existing higher-rate debt and free up equity to purchase additional properties.
“Time was an issue in this transaction,” said Reed, noting the borrower’s concern that interest rates would rise substantially before his loan matured. Reed helped the borrower define his options, who decided to retire his existing debt early and incur a prepayment penalty. “We were able to lock the rate early before treasuries increased dramatically,” Reed says. “The interest rate on the new loan was approximately 200 basis points lower than the rate on the loan that was paid off.”
The borrower has owned Catalina Village for two decades, and has maintained high occupancy levels by regularly investing in capital improvements, adding a new pool and gated entranceway, upgrading the landscaping and the clubhouse, and adding a new stone security guard building and two stone walls at the property entrance. The property is close to Interstates 10 and 17 as well as downtown Phoenix, further adding to its attractiveness.
The 30-year fixed-rate loan has 10 years of interest-only payments, seven years of yield maintenance, and payable on an actual/360 basis.
Capital One Bank’s Commercial Real Estate Group offers a comprehensive array of financing solutions for property owners and developers nationwide, including balance sheet and agency lending. Additional information can be found at www.capitalonemultifamily.com. Capital One Commercial Banking leverages a relationship-based banking model that seamlessly delivers an array of products and services including loans and deposit accounts, treasury management services, merchant services, investment banking, international services and correspondent banking.