Team Hachem successfully arranged $57,900,000 in non-recourse, construction financing for a mid-rise, Class A, 187-unit multifamily development. The Project will serve the rapidly developing area of north Tempe. The Property is immediately adjacent to a Valley Metro light rail stop, offering residents convenient access to Downtown Tempe, Arizona State University, Sky Harbor Airport, and downtown Phoenix.
The Sponsor, headquartered in nearby Scottsdale with a successful track record of multifamily and commercial developments, engaged the Hachem Team in 2020 to source high-leverage, non-recourse financing. Despite being relatively early in the Project’s development stage, the team sourced a Lender offering a 90% LTC loan, which includes a participating feature. This unique structure features the Lender sharing profits with the Sponsor in exchange for the high leverage financing.
The construction budget grew significantly during the longer-than-expected entitlement and permitting process. Fortunately, thanks to the Hachem Team's close relationship with the Lender, a commensurate increase in market rents, and the strength of the Sponsor, the final loan amount was nearly 40% higher than that of the original loan application in 2021.