Pref Equity for Multifamily Developments - Phoenix, AZ
$31,600,000 in pref equity arranged by PlattPointe Capital.
PHOENIX, AZ – PlattPointe Capital recently arranged $31,600,000 in preferred equity financing for the development of The Governor, a five story, 176-unit apartment community in Phoenix, AZ and Moderne Arrowhead, a three story, 182-unit garden style apartment community in Glendale, Arizona. The projects will feature a total of 358 units across 12 buildings. These Class A properties will feature a mix of studios, one, and two-bedroom units. The two developments encompass over $136MM in total costs and are set to break ground immediately with completion slated for mid-2024.
PlattPointe Capital was able to arrange $31,600,000 from a private equity fund that provided total combined leverage of 85% LTC and 75% Loan to Stabilized Value. The financing 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.
• $31.6MM in Preferred Equity
• Up To 85% of Total Costs
• 13.5% Interest Rate
• 36-month Term with two extension options
The Sponsorship team, Moderne, has substantial experience having developed, acquired, owned, and managed more than 40,000 multifamily units across core markets including California, Texas, and especially Phoenix where they are based, and have considerable plans for continued growth. Originally, the Sponsor retained PlattPointe Capital to round out its capital stack options across its pipeline and to a conduct an extensive market study to identify prospective debt and equity partners. PlattPointe Capital identified a construction-oriented private fund that ultimately provided the most attractive terms for the project. The Sponsor structured a joint venture with a Southeast-based investment firm to complete the equity requirements.
These projects represent 358 brand new units of upscale multifamily product that are being delivered into one of the fastest growing counties in the country, Maricopa County. Arizona is expected to add nearly 550,000 jobs between 2019 and 2029 and should continue to lead the nation as a destination for employment and advanced industries like the Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC AZ Corp.) that intends to build a manufacturing facility creating more than 1,600 jobs. Maricopa County boasts such employers as Arizona State University, American Express, Intel, Honeywell, Wells Fargo, Everise, Southwest Airlines, Intuit, Apple, and Roche.
These closings highlight PlattPointe Capital’s continued growth in Arizona. We look forward to additional successes in Phoenix as this market has become one of the most attractive business and population growth hubs in the country.
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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