The Zone Apartments Near University of Arizona in Tucson Acquired as Upleg of Reverse 1031 Exchange; Fixed Rate Bank Loan Features Interest Only Component
Tucson, Ariz. (November 23, 2022) – Gantry, the largest independent commercial mortgage banking firm in the U.S., has secured $8.5 million of financing for the acquisition of The Zone Apartments, a 26-unit complex that is master leased to a student housing operator called Tripalink. Each unit consists of 4-bedrooms, 4.5-baths and common areas including kitchen and living area. Tripalink rents the property by the bedroom totaling 104 tenants at full occupancy in a co-living format.
Gantry’s Adam Parker, Principal, and Chad Metzger, Senior Associate, with the firm’s Phoenix production office secured the loan on behalf of the borrower, a private real estate investor. The loan was provided by a regional bank with a 5-year fixed rate inclusive of the first two years of interest only payments.
According to Gantry’s Adam Parker, “This transaction required navigating several complicated challenges, including a master lease with a student housing provider for the entirety of the complex, a Reverse 1031 Exchange component, and rising interest rates. We were able to work through these issues as the lender took the time to understand the asset’s unique position in the marketplace. The subject property is very well located near the University of Arizona, and the master lease is currently at a below market rental rate. The Sponsor understands the immediate submarket intimately as they own an adjacent multifamily asset.”
This transaction closed October 28, 2022.