287 Unit Multifamily Development - Phoenix, AZ
$69,200,000 loan arranged by PlattPointe Capital.
PHOENIX, AZ – PlattPointe Capital recently arranged a $69,200,000 senior construction loan for the development of an apartment project located in the Deer Valley submarket of Phoenix. The project will feature 287 units across 11 buildings. This Class A property will feature a mix of studios, one, and two-bedroom units averaging 842 square feet. The $84.4 million project is set to break ground immediately and is slated for completion in mid-2024.
PlattPointe Capital was able to arrange a 6.5% interest rate loan from a non-recourse private debt fund that provided leverage at 75% LTC and 65% Loan to Stabilized Value. The construction loan has an initial term of three years, with two extension options, and capitalizes the project’s development budget through its lease-up upon commencement of operations.
• $69,200,000 loan amount
• 75% LTC
• 6.5% interest rate
• Non-recourse, with standard bad boy carveouts
• 36-month, interest-only with two extension options
The Sponsorship team has substantial experience having developed, acquired, owned, and managed more than 40,000 multifamily units across core West Coast markets including California, Texas, and especially Phoenix where they are based, and have considerable plans for continued growth. Originally, the loan was under application with a HUD lender, but the sponsor brought in PlattPointe Capital to round out its capital stack options on the project and to a conduct a full market study for debt and equity. PlattPointe Capital brought a construction-oriented private debt fund that ultimately provided the most attractive financing terms for the project. The lead sponsor structured a joint venture with a Los Angeles-based family office to complete the equity requirements.
The project is a 287-unit upscale multifamily development in Maricopa County, Phoenix, AZ located near 1,128 acres of land recently purchased for $89MM by Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC AZ Corp.) where the company intends to build a manufacturing facility creating more than 1,600 jobs. This prime location, among the fastest growing submarkets of Phoenix, is close to the Deer Valley Airport, and has employers such as Arizona State University, American Express, Intel, Honeywell, Wells Fargo, Everise, Southwest Airlines, Intuit, Apple, and Roche.
This is PlattPointe Capital’s first closing in Arizona. We are looking forward to many more as Phoenix has become one of the most attractive growth hubs in the country. Countless technology companies are relocating their headquarters here from Silicon Valley, New York City, and the likes.
PlattPointe Capital LLC is a boutique commercial real estate capital advisory firm that helps developers and investors navigate the capital markets by arranging optimal alternative debt and equity options for a client’s project. Our vision is to engineer the most efficient capital stack based on the constraints of a given project and sponsor’s needs.
More information can be found at www.plattpointe.com.
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TRANSACTION BY THE NUMBERS
Loan to Cost (LTC)
Non-Recourse with Carveouts