300-Unit Class A Multifamily Property in Colorado Springs Receives $41M Financing
Colorado Springs, CO – George Smith Partners arranged $41 million in financing for the acquisition of The Vineyards, a 300-unit Class A apartment community in Colorado Springs, Colorado on behalf of a private real estate investment and development company.
The financing, arranged by George Smith Partners’ Principal Jonathan Lee and provided by Walker and Dunlop, comprised 75-percent of the acquisition cost. The non-recourse loan closed at 4.31 percent with a 12-year fixed rate at nine years interest only. Bill Morkes and Craig Stack of Colliers International represented both the buyer and the seller in the transaction.
“This structure is rare in the current financing climate. Our client was seeking a long period of interest-only financing, however lenders were initially hesitant to agree to these terms,” Lee says. “By demonstrating the strength of the asset, which is well-positioned as one of the few Class A apartment communities in Northern Colorado Springs, as well as the projected growth in NOI based on the buyer’s plan for the property, we were able to secure financing that met the needs of both the client and the lender. Further, we recommended locking the loan rate prior to the election, which saved our client from a spike in cost when the U.S. Treasury jumped 50 to 60 basis points post-election.”
The buyer plans to renovate all units and upgrade the community’s landscaping and on-site amenities, including the clubhouse, fitness center, leasing offices and business center, all of which will support moderate rent growth at the property.
Lee notes that The Vineyards was acquired with only one unit vacant out of three hundred, indicating strong renter demand to support this capital improvement plan.
Located on the north side of the city, The Vineyards is in close proximity to several top employers, including St. Francis Medical Center, one of the state’s top hospitals, as well as USAA Financial Center and Lockheed Martin. In addition, the property is surrounded by a variety of shopping and recreation attractions including luxury shopping malls, the nation’s only mountain zoo, and a U.S. Olympic training center.
Image courtesy of George Smith Partners