DETROIT—The Detroit metropolitan area saw a lot of business dry up during the recession, but within the past year or so, much of that activity has returned. Q10|Lutz Financial Services has secured a $21 million loan on a 544-unit apartment property in suburban Troy, for example, and company officials say such deals have gotten much easier to secure for properties in the Detroit area.
“Now, we have several lenders coming to us every week who say they would be happy to provide financing,” Adam M. Lutz, managing principal, tells GlobeSt.com. And potential borrowers are “excited to have many more options at their disposal.”
The Troy apartments, now named Gables of Troy, were just acquired for $25 million by Jeffrey Kaftan of Kaftan Communities from BDB Properties.
Q10|Lutz worked with Matthew Kirsch of Bank of America’s New York office to structure the acquisition loan. The terms of the loan were 75% LTV, 10-year, non-recourse loan with four years interest-only, followed by a 30-year amortization at an interest rate of 4.46%.
“The reserves, the low interest rate and the interest-only period of the loan will allow Kaftan to complete improvements to the property,” says Michael Schick, director of Q10|Lutz.
The complex, located on I-75 between Livernois and Rochester roads, will use the funds escrowed to launch a $1.1 million renovation to the clubhouse, exterior and interior, and improve roads, hallways and signage. It is currently 94% occupied.
Lutz adds that financing got a lot easier to secure around the end of 2012. And in 2013, the company secured about $565 million in loans, probably double what it got in 2012, with half of that total earmarked for properties in Michigan.
“This year we are on a similar pace. It’s a very busy time and we’re excited about the momentum.”