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TUCSON-Bascom Arizona Ventures LLC has obtained $122.14 million to replace its capital and get funds to upgrade the 2,913-unit multifamily portfolio. About $30 million will be directed toward property improvements.

“This’ll be a complete interior and exterior rehab on the entire portfolio,” says Tim Campbell, regional director of North America lending with GE Real Estate in Irvine, CA, which provided the capital in two loans. He says the Scottsdale-based Bascom plans to immediately jump into renovating the class B and C portfolio. Exterior work will take about one year to complete.

“Interior upgrades are based on tenant roll,” Campbell explains to GlobeSt.com. “Those typically take about 18 months to two years to complete.”

While this is not GE’s first financing of a Bascom project, Campbell says it is its first one for Tucson. However, Bascom’s track record in Arizona, plus a long-term relationship with the lender, eased the comfort level. “Bascom believes Tucson is an area that will do well in multifamily,” Campbell says. “When we looked at the portfolio, we agreed. With population at a million and home prices increasing, the market supports Bascom’s wanting to come in, renovate and increase rents.”

Both loans have three-year terms tied to the Treasury interest rates, with 18 months of yield maintenance. Campbell explains that such a loan is flexible and doesn’t tie the borrower into a huge pre-payment penalty after 18 months. “If they want to sell any of the portfolio before the end of the term, it’ll be more flexible to do that,” he says.

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