TODAY’S DEALS: NorthMarq Clinches Non-Recourse Bank Financing

NorthMarq Capital secures a 12-year loan, and Capital One helps a client lock in lower rates.

Phoenix—Luke Donahue, senior director of NorthMarq Capital’s Phoenix based regional office, secured the $20 million refinance of Coral Point, a 337-unit multifamily property located at 2343 West Main Street in Mesa, Ariz. The transaction was structured with a 12-year term and 30-year amortization schedule. NorthMarq arranged financing for the borrower through its relationship with a national bank.

“This non-recourse financing provided the owner with an attractive low fixed interest rate. NorthMarq Capital was pleased to arrange this financing for our valued repeat client,”said Donahue.

Capital One helps client lock in lower rates

Bethesda, Md.—Capital One announced that it has provided a $11.9 million Freddie Mac fixed-rate loan to refinance Catalina Village, a 376-space, all-age manufactured housing community (MHC) in Phoenix, Ariz. 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 said. “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 entrance way, 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.

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