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%.

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.

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.