Based in Phoenix Arizona, newly formed Tower Capital enters the market strong with 27 million dollars in financing arranged across four properties.
Located near Sky Harbor Airport in Phoenix, the Holiday Inn & Suites is a 228 key, full service hotel built in 1981 and renovated in 2011. The client’s objective was to add value through additional capital improvements, including a major renovation to the hotel’s restaurant, as well as by producing operational efficiencies via the use of shared staff and management from another hotel asset they own in the vicinity. The $15,370,000 non-recourse bridge loan, secured through a REIT, was based upon 75% loan-to-cost and included both renovation costs along with working capital. Adam Finkel, Principal at Tower noted, “The challenge was pulling everything together within a 30 day timeframe to close. Given the complexity of the transaction, it required all hands on deck and we accomplished it without a hitch.”
Solana Terrace, formerly known as Sonoma Grand, is a 288 unit multifamily property located in Phoenix, Arizona. Originally built in 1985, the property underwent a major renovation in 2013, which included new roofs, HVAC units, exterior paint, façade stonework, renovated common areas, and interior unit upgrades. Commenting on the transaction, Mr. Finkel said, “In cooperation with our partners at Walker & Dunlop, our client was able to take advantage of Freddie Mac’s exceptionally low rates and interest only payments to maximize cash flow and the return to their investors.” The $9,800,000 7-year loan was based upon 80% loan-to-value and included three years of interest only payments.
Gran Limon is a 24 unit multifamily property located in Tempe, Arizona. Originally constructed in 1961, the borrower purchased the asset in 2013 and performed a major interior and exterior renovation, allowing him to substantially raise rents and increase the value of the property. Tower Capital secured the $1,400,000 non-recourse loan through a local bank, which returned 100% of the borrower’s equity plus some additional cash out, with less than one full year of stabilization.
Sandstone condominiums is a 12 unit multifamily property located in Phoenix, Arizona. The local experienced sponsorship purchased the property in order to entitle and sell to a developer. The 100% occupied asset provides the sponsor with cash flow during the entitlement process. The low interest rate loan secured by Tower Capital offered the most flexibility with a 5-year term and no prepayment.
