$20M Multifamily Acquisition Phoenix | Commercial Lending Solutions 
Loan Size Example

$20 Million Multifamily Acquisition in Phoenix

By Trevor Damyan, Commercial Mortgage Broker at Commercial Lending Solutions

A $20 million multifamily acquisition in Phoenix represents a core-plus to value-add play on mid-size garden-style or low-rise apartment communities in strong submarkets like Scottsdale, Tempe, or Central Phoenix. At this loan size, borrowers typically target stabilized or lightly repositioned assets with 80 to 100 unit counts and strong fundamental demand driven by Phoenix's sustained population inflows. Lenders competing for this bracket include agency lenders (Freddie Mac DUS and Fannie Mae DUS), regional banks with multifamily expertise, and life companies seeking 55 to 65 percent LTV positions. Rates in this market have stabilized in the 5.75 to 5.95 percent range for 10-year fixed terms, reflecting benchmark treasury levels and moderate spread compression as competition for well-underwritten Phoenix deals remains intense.

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Capital Stack

What a $20M Multifamily Acquisition Capital Stack Looks Like

At $20 million, the capital stack is dominated by agency lenders and balance-sheet banks, with life companies playing a complementary role for higher leverage scenarios. Agency debt (Freddie Mac DUS or Fannie Mae DUS) typically anchors the stack because these programs offer 10-year fixed rates, 25 to 30 year amortization, and pricing that is hard to beat on stabilized assets with clean sponsorship. Life company lenders step in when borrowers seek leverage beyond agency appetite (typically 65 to 70 percent LTV) or when the asset profile requires more flexibility on underwriting or recourse.

Capital Source Rate / Cost Size / LTV Notes
Agency lender (Freddie Mac DUS or Fannie Mae DUS) 5.75 to 5.95 percent, 10-year fixed $13 to $14 million (65 to 70 percent LTV on stabilized assets) Dominant execution path for primary debt; requires full recourse or limited carveouts; 25 to 30 year amortization; DSCR floor typically 1.20x; 45 to 60 day closing timeline
Regional bank balance sheet 5.85 to 6.15 percent, 5 to 10 year fixed or adjustable $8 to $12 million (40 to 60 percent LTV paired with agency) Fills gap when sponsor seeks leverage above agency comfort; faster underwriting; relationship-driven pricing; common in Phoenix given strong regional bank presence
Life company lender 5.95 to 6.35 percent, 10 to 12 year fixed $10 to $14 million (55 to 65 percent LTV on value-add or non-stabilized) Preferred for longer amortization (30 to 35 years) and flexibility on cash flow or repositioning risk; lower DSCR covenant (1.10x to 1.15x); recourse negotiable; 60 to 90 day close
Sponsor or preferred equity 8 to 12 percent IRR target $4 to $7 million (20 to 35 percent equity) Typical equity check at this size; sponsors often bring 25 to 30 percent for value-add plays; held through stabilization and exit

Pricing reflects active CLS CRE quote pipeline as of April 2026. Specific deal pricing depends on sponsor, property, and structure.

Sponsor Profile

Who Closes a $20M Multifamily Acquisition Deal

Sponsors closing $20 million acquisition loans in Phoenix typically have $50 million to $300 million in net worth, with prior experience managing 3 to 10 apartment communities across the Sun Belt or West. Many are established regional operators or emerging institutional platforms expanding their Phoenix footprint to capture population growth and rent appreciation. Motivations range from acquiring stabilized assets for long-term hold and cash flow, to acquiring lightly troubled or deferred-maintenance properties for 12 to 24 month repositioning and retenancy.

From the CLS CRE Pipeline

A Real $20M Example

A Phoenix-based sponsor acquired a 94-unit garden-style community in Tempe for $19.8 million in early 2024, with average rents at $1,150 per unit and below-market occupancy at 82 percent. An agency lender committed $13.2 million at 5.81 percent fixed for 10 years with full recourse, while a regional bank provided a $6.6 million junior loan at 6.05 percent fixed for 7 years. The sponsor invested $2 million in unit upgrades, amenity refreshes, and management transition, reaching 95 percent occupancy and $1,320 average rents within 18 months. The deal achieved 1.35x DSCR at stabilization and set the platform for acquisition of two additional Phoenix properties over the following 12 months.

Anonymized. All deal references protect borrower and lender identity.

FAQ

$20M Multifamily Acquisition Phoenix FAQ

Agency lenders typically target 60 to 70 percent LTV on stabilized assets, while sponsors seeking maximum leverage can reach 75 to 80 percent LTV by layering agency debt with a life company or bank junior piece. LTV on value-add or repositioning plays often runs 65 to 75 percent to reserve capital for stabilization work and account for lower initial cash flow. The exact LTV depends on property condition, sponsorship strength, and the stabilized NOI underwriting.
Agency lenders typically enforce a DSCR covenant of 1.20x, while life company and bank lenders may accept 1.10x to 1.15x if the sponsor has adequate liquidity or if value-add upside is clearly defined. Most loans include a step-down provision, allowing a lower DSCR (e.g., 1.05x) during an initial interest-only period or during active repositioning. Hit the DSCR floor and you trigger default language, so sponsors underwrite stabilized cash flow conservatively.
Agency lenders move in 45 to 60 days from complete application to closing, while regional banks and life companies typically require 60 to 90 days depending on property condition and sponsor documentation. Due diligence includes phase one environmental, third-party appraisal, property condition assessment, rent roll verification, and DSCR modeling. Expedited closings (30 to 40 days) are possible with pre-approved sponsors or off-market acquisitions, but expect longer timelines if the property has deferred maintenance or lease-up risk.
Yes, interest-only periods of 12 to 24 months are standard for value-add or repositioning plays, while stabilized acquisitions often close with full amortization from day one. Agency lenders allow IO periods for recent acquisitions or stabilization projects, but will require step-up to full amortization once defined milestones are hit (e.g., occupancy at 90 percent). Life company lenders are more flexible with longer IO periods and often match the sponsor's underwritten stabilization timeline.
Agency lenders typically require full recourse or carveouts for fraud, misappropriation, and environmental issues, though some recent loans have accepted limited guarantor recourse tied to DSCR or net worth thresholds. Life company and bank lenders structure recourse on a case-by-case basis, often conditioning full release on 1.35x DSCR or 3 to 5 years of stabilized operation. Phoenix sponsors with multiple properties in their platform often negotiate release provisions tied to refinance or exit.


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