NORTHRIDGE, CA—Index Investors have secured arefinancing loan for a rare townhome-styleapartment complex. The loan, arranged byJohnson's Capital, has a low interest rate around4%.

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Sean Barry and Josh Kashani ofJohnson's Capital's Los Angeles office arranged the financing onbehalf of Index Investors, which borrowed $7 million or $175,000per units. According to Barry, the price per unit for the market isvery high and presented a challenge in securing the funding, whichwas exacerbated by limited market comparables due to the rarity ofthe asset—a 40-unit apartment complex comprised of mainly three-and four-bedroom units.

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The refinancing loan has five-year term and a loan-to-valueratio of 70%. Although Barry and Kashani were able to secure a lowinterest rate, the first three years of the loan will beinterest-only payment with no prepayment penalty after the firstyear. After the first three years, the payment schedule willconvert to a 27-year amortization. A regional bank funded theloan.

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Index Investors' investment strategy involves purchasing,repositioning and selling assets. For this asset, it hassignificantly renovated half of the units, installing new windows,high-end appliances, hardwood floors and new finishes.Additionally, it has added new landscaping, secured entry and anupgraded façade to the building exterior. The investor will use theproceeds of the loan to payoff existing financing and recoup equityalready invested into the project.

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GlobeSt.com reported a few weeks ago that the owner of a nearbyproperty also secured a refinancing loan. The private investorsecured $32 million to refinance an existing CMBSloan it had for Park Parthenia Apartments, a447-unit apartment complex. The loan also had a 4% interestrate.

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Kelsi Maree Borland

Kelsi Maree Borland is a freelance journalist and magazine writer based in Los Angeles, California. For more than 5 years, she has extensively reported on the commercial real estate industry, covering major deals across all commercial asset classes, investment strategy and capital markets trends, market commentary, economic trends and new technologies disrupting and revolutionizing the industry. Her work appears daily on GlobeSt.com and regularly in Real Estate Forum Magazine. As a magazine writer, she covers lifestyle and travel trends. Her work has appeared in Angeleno, Los Angeles Magazine, Travel and Leisure and more.