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Apartment Loan in Phoenix:

Since April of 2000 Caffrey & Company LLC has been helping real estate investor’s nationwide find the best loan product for commercial real estate investment properties. Call for great rates for an apartment loan in Phoenix. Caffrey & Company LLC has a special focus in Phoenix apartment loans.  The most attractive, non-recourse loans terms start at $1,000,000 for multifamily properties.  Therefore, if you are looking for low interest rates, a non-recourse loan up to 80% of value (Over $7 million leverage up to 85% is available) you are at the right place.  These specialized apartment loan products are available in all of the Phoenix suburbs including Mesa and Chandler.

Multifamily Finance Underwriting:

Each loan product has unique underwriting requirements.  Above all, how the loan data is presented to the lenders can have a negative or positive impact on pricing and loan proceeds.  We offer this expert loan underwriting for an apartment building loans in Phoenix.  Therefore, this will help to achieve the best pricing and loan terms for your apartment building or commercial real estate investment.

Free Loan Quote for an apartment building loan:

We encourage our clients to submit key property level data for a free loan underwriting review.  This initial loan underwriting normally takes less than one business day for us to respond with several apartment loan options for you to consider.  Here is a short list of property level data that would aid in providing a loan quote:

Required Underwriting information needed:

  • Last two years and Year-To-Date detailed Profit and Loss statements (in addition a trailing 12-month P&L is best if available) on the apartment complex.
  • Current Rent Roll
  • Brief narrative description of the property.
  • If available a few electronic photos. Or a copy of the real estate agent’s marketing package.
  • What is the purpose of the loan? Acquisition, Refinance, cash out, re-position the property (renovations).

Next we will need to understand your investment objectives.  How much do you wish to borrower on the apartment complex?  Is this a long-term investment or short-term investment?  In other words outline your apartment loan in Phoenix loan request.

We understand the financing of an apartment complex is a very important component of your investment.  Therefore, we encourage our client to send us details on the property before finalizing the purchase and sale contract for an indication of the type of loan that might be available to a particular property.  We can review and provide some up front loan options.

Fixed Rate Loan Terms are Available for Multifamily in Phoenix:

Loan terms are available from 3-years up to 35-years (40-years for new construction on loans over $7 million).  The Apartment buildings can be Garden Style, High Rise, Age Restricted, Student Housing, Section 8 Tenants and subsidize properties.  There must be at least 5-units.  If you have several buildings all with five or more apartment units that you wish to place under one loan no problem, the buildings should be within 3 to 5-miles from the other properties for best loan terms.

How long will it take to close an apartment loan in Phoenix?

The closing process normally takes between 45 and 55 days to close an apartment building loan in Phoenix.  Closing costs vary between loan products.  Before you reach for your checkbook we will provide a detailed estimate of the anticipated closing costs.   At this stage you will know the loan product, the loan terms, and the anticipated closing costs to allow you to make an informed decision before moving forward.

The Phoenix Multifamily market informaiton:

Despite previously reported minimal contractions in quarterover- quarter readings due to Covid, as of Year End 2020, the Phoenix MSA continues to be a nation leader in year-over-year rent growth rising 4.7% to $1,284. This growth rate is four times higher than the National average which contracted (0.8%), but still $178 below the National average rent of $1,462.

Occupancy rates continued their upward trajectory and increased 20 and 50bps over-the-quarter and year respectively to 95.6%. This occurred despite delivering 2,189 new units,
slightly above the 3-year delivery average of 2,000 units. This marks the 36th consecutive quarter that occupancy has been above the 20-year average of 91.6%.

Given the current construction rate, 2021 should prove to be the highest delivery amount since 2009’s 9,315-units. There are 25,252 units currently under construction throughout Greater Phoenix which marked the 27th consecutive quarter where the number of units under construction was above 10,000. Investment sales volume significantly decreased over-the-year by 24% to $5.5B, with an average PPU (Price Per Unit) increasing 19% to $192,356.

Out of town investors:

We expect to see more California investors coming into this market to avoid some of the rent regulations that went into effect in January of 2020.

By the numbers for Phoenix:

As one of the fastest growing metropolitan areas in the US, immense demand for housing in Greater Phoenix benefited apartment operators amid a multifamily construction boom. More than 70,800 net residents came to the Valley in 2020. The additions combined with limited available single-family housing for sale and a slow pace to home starts led to more than 9,600 net apartment units being absorbed in the last four quarters. Annual leasing activity was up more than 21% than the preceding five-year average. Leasing activity and development was concentrated in the West Valley and Downtown Phoenix, near growing employment nodes and major transportation routes. Metro-wide, nearly 9,500 units came online over the last four quarters, part of more than 38,600 additions in the last five years. With leasing activity outperforming the influx of deliveries in the last year, apartment occupancy increased 20 basis points year over year. At an average of 96.2% in the first quarter of 2021, the occupancy rate was 100 basis points higher than the five-year average. Also in the last year, apartment operators advanced effective rent on average 5.7% to $1,272 per month in the first quarter of 2021.

Phoenix remained #5 in the Top 10 Metros for the third month in- a-row with 0.4% month-over month job growth, or 9,100. As of December 2020, Phoenix’s nonfarm payroll jobs total 2,198,800. Combining job losses for March and April, Phoenix lost 214,400 jobs. Growth since May has brought back 181,800 of those jobs or 85% recoupment (5th highest in the Sunbelt, just behind DFW). If the current recovery holds, employment normalization should be achieved in 1H 2021. In December, Phoenix witnessed over-the-month jobs gains of 9,100. The largest over-the-month numeric gains were seen in Trade, Transportation & Utilities (+8,200), Education & Health Services (+3,700) and Professional & Business Services (+3,000) employment super-sectors.

Pre-lease absorption rates ended 2020 with an average of 13 units per property per month after hitting a temporary high of 18 units in Q3 as the local economy began reopening. Based on the average number of units under construction per property, which is 258, and assuming 90% occupancy for stabilization; current delivery-to-stabilization period is hovering around 18 months and well in line with the 18-to-24-month stabilization rubric used by developers. For the last 5 years the Phoenix MSA was growing, on average, 200 to 225 residents per day. Over this same time, Maricopa County was the fastest growing county in the United States and the Phoenix MSA replaced Boston as the 10th largest MSA in the U.S. While more formal population counts are yet-to-be-released, anecdotal evidence suggests that over the last half of 2020 the Phoenix growth rate increased nearly 25% to +/-260 new residents per day. If this holds true it would be the fastest growth rate the Phoenix area has experienced since the 90s, and the reason builders/developers/businesses are bullish on the Valley.

Average rent for Greater Phoenix was up 4.7% year-over year to $1,284 and up over-the-quarter by 2.2%. Occupancy for the region was 95.6% and 50bps higher year-over-year. This marks the 12th consecutive quarter occupancy has been above the 5-Year Moving Average of 94.7%, and 36th consecutive quarter above the 20-Year Moving Average of 91.6%.

YE 2020 Summary of Multifamily Sales (100+ units); Transactions: 111 Sales (down 38% year-over-year); Total Sales Volume: $5,501,941,611 (down 25% year-over-year); Average Price/Unit: $192,356 (up 19% year-over-year).

In conclusion you find details on several loan products by following these links: Freddie Mac, Fannie Mae, HUD/FHA, Commercial Mortgage Back Securities (CMBS) and other loan products.  Want more details and sample interest rates for apartment check out Interest Rates for Apartment Loans also on our web site:   Multifamily Loan Interest Rates.

Keep Caffrey & Company in mind when searching for an Arizona lender for apartment loans. Have a question please call:  Mike Caffrey (913) 402-7077 or email: Mike@CaffreyLoans.com

On our web site you can read about specific loan products: www.caffreyloans.com/loan-products, offered by Freddie Mac, Fannie Mae, HUD/FHA, Commercial Mortgage Back Securities (CMBS) and other loan products. Want more details on sample interest rates for apartment check out Interest Rates for Apartment Loans also on our web site: www.caffreyloans.com/apartment-loans.

Have a question please contact
Mike Caffrey
Telephone: (913) 402-7077