West Englewood apartment complex secures refinancing
Walker & Dunlop, a national commercial real estate finance and lending institution, arranged a $46.65 million refinance loan for a 272-unit Englewood apartment complex.
Walker & Dunlop’s Jay Thomas worked on behalf of the borrower, Capstone at Vallagio, to secure a 10-year, fixed-rate, five-year interest-only loan through Fannie Mae. The lender also offered 65% loan to value.
According to Thomas, the reason for the refinancing was to take the loan off a floating-rate basis and convert it into a new long-term, fixed-rate loan at a 3.1% rate. He said the transaction was a cash neutral refinance. The deal closed May 29.
Closed during COVID-19, Thomas said there were some unexpected challenges while arranging the financing.
“We signed the loan up in early March, right before the outbreak got serious. The expectation was to close the loan at the end of April. However, in the last few weeks of March, market rates were all over the place, and nobody knew what to expect for monthly property collection moving forward, so there was a slight delay in closing,” Thomas said.
Once the market and rent collections stabilized and interest rates dropped, Thomas said his team was able to arrange an even better loan than they originally expected.
“Everyone’s been surprised with how multifamily rents held up over the first few months of COVID-19, and this property was no exception to that rule,” Thomas said. “Properties like Capstone at Vallagio that are Class A assets in primary or high-end secondary markets have performed the best out of any asset markets in maintaining collection levels consistent with their pre-COVID levels.”
Located at 158 Inverness Drive in West Englewood, Capstone at Vallagio offers studio, one- and two-bedroom units complete with updated interiors featuring vaulted ceilings, walk-in closets, hardwood flooring, air conditioning, and washers and dryers. The property also includes community amenities such as a pool, outdoor courtyard and clubhouse.
Its central location puts residents minutes away from a variety of hiking trails and parks as well as the Centennial Airport and retailers, including Walmart Supercenter, Maggiano’s Little Italy and TopGolf.
Featured in the July 1-14, 2020, issue