Cortland Partners Nabs $50M Acquisition Loan for First Phoenix Foray
Atlanta-based Cortland Partners has secured a $49.6 million loan to acquire its first Phoenix-area property: a 412-unit multifamily complex called Arrowhead Summit, according to an announcement from Walker & Dunlop, which structured the deal.
The Freddie Mac acquisition loan takes advantage of a flexible structure known as “float-to-float.” For three years, Cortland will owe only interest at a floating rate while it finishes a renovation of the property. After that, the company will embark on paying off a separate seven-year floating-rate loan, including two years of interest-only payments.
“Walker & Dunlop and Freddie Mac proved to be outstanding partners in helping us close our first deal in Phoenix,” Mike Altman, Cortland’s head of investments, said in a statement. “We are thrilled about this acquisition and look forward to not only transforming Arrowhead Summit but also growing our footprint in the greater Phoenix market.”
Cortland plans to pour $9 million into renovating the property, in the northwest suburb of Glendale, Ariz., over the next two years. The management company aims to upgrade energy efficiency and add to in-unit amenities, including new kitchen fixtures, fireplaces and thermostats that can connect to the Internet.
It also aims to up the rent. Today, 800-square-foot one-bedrooms let for between $950 and $1,200 per month, while 1,100-square-foot two-bedrooms go for just under $1,400.
“We are confident that Cortland’s substantial construction, development and operating experience will ensure a successful repositioning of Arrowhead Summit,” Walker & Dunlop’s Stephen Farnsworth said in prepared remarks. “[Cortland] has a fully integrated platform…which allows them to successfully execute large-scale renovation projects such as Arrowhead Summit.”
Representatives for Cortland, Walker & Dunlop and Freddie Mac were not available for further comment.