Hunt Real Estate Capital provided a loan in the amount of $5.5 million to finance the acquisition and renovation of two affordable multifamily properties located in the Tacoma, Washington region.
The properties include Colvos Terrace and 435 South Fawcett Avenue.
Located in Gig Harbor, Washington, Colvos Terrace is comprised of a single two-story building containing 27, one-bedroom units. Built in 1981, the property is currently subject to a five-year U.S. Department of Housing and Urban Development Housing Assistance Payments Contract, which will be extended to 20-years upon the receipt of permanent financing. The property includes a community room with a kitchen and lobby, resident storage lockers, a common laundry area, open outdoor space and 42 surface parking spaces. Gig Harbor is located approximately ten miles northwest of Tacoma and approximately 43 miles southwest of Seattle.
435 South Fawcett Avenue
Located in Tacoma, Washington, 435 South Fawcett Avenue is comprised of a single three-story building consisting of 60 units. The unit mix is 23 one-bedroom apartments, 25 two-bedroom units and 12 three-bedroom apartments. Built in 1996, 435 Fawcett is an expired LIHTC property but remains subject to a LURA that impose use restrictions on 100% of the units at or below 45% of AMI. With the newly awarded 4% Low-Income Housing Tax Credits, the property will be subject to the same rent restrictions for an additional 30 years. The property offers 28 parking spaces in a secured garage with 17 additional surface spaces. Tacoma is located approximately 35 miles south of Seattle.
The borrower is Shelter Resources, Inc. originally formed in 1978 in the State of Washington. The loan is a single Bond and Deed of Trust, and two MBSs, represented as a bifurcated loan structure. Both notes will be cross-defaulted and cross-collateralized, and the terms are 16-years with 35-year amortization.
“Shelter Resources was formed to develop, acquire and renovate affordable housing projects throughout the Pacific Northwest and they serve low to moderate-income families and seniors,” noted Suzanne Cope, Director, Loan Originations at Hunt Real Estate Capital. “They originally acquired these properties in April and June of 2017 using bridge financing and upon closing of the new will undertake a moderate rehabilitation at both properties.”
The borrower plans to invest approximately $1.1 million at Colvos Terrace and approximately $2.34 million at Fawcett Street apartments.
“Both properties are currently 90% occupied and are backed by a quality sponsor with a successful track record owning and investing in affordable properties in the local area,” added Cope. “We were pleased to partner with them on this transaction to support quality affordable housing in the Tacoma area.”