KNOXVILLE, TN-Sutter Mill Apartments and Meadowood Apartments have secured refinance loans totaling $10.87 million through the FHA program. The multifamily properties inked 35-year terms at a 4.63% interest rate in a low-vacancy Knoxville apartment sector.
Tammy Tate, vice president of Love Funding, a mortgage banking firm in Knoxville , secured financing for both loans 15 days after submitting the loan packet. Tate closed a $5.44 million loan for Sutters Mill Apartments, a 252-unit complex, and a $5.44 million loan for Sutters Mill, a 235-unit complex.
“The interest rates continue to drop, but we might see rates stabilize between now and the end of the year so there’s a big push by multifamily property owners that are FHA-insured to get these refis,” Tate tells GlobeSt.com. “Occupancy rates on both these properties is in the high 90s.”
Tate says the refi market in Knoxville’s multifamily sector has picked up since the beginning of the year. Borrowers who once thought FHA loans were tedious are turning to the instrument to access lower-cost capital without recourse.
New construction in Knoxville’s multifamily sector is also under way. In west Knoxville, the Cedar Bluff area is seeing a construction explosion as developers prepare to fill 104 acres there with housing, restaurants and retail, including 337 apartments.
Another 720 housing units are planned as part of a $180 million New Urbanism movement that includes retail and office space on 134 acres in the Northshore Town Center project. Jim Harrison of Hunter Development, Budd Cullom of Cullom Properties, and Mike McGuffin purchased the property a year ago with revelopment in mind.
“The west part of Knoxville has always been the hottest part of town, but apartment leasing is strong all over the city right now because the availability is low,” Rick Gentry, principal of Apartment Broker LLC in Knoxville, tells GlobeSt.com. “There haven’t been any apartments built here in a long, long time.”
Indeed, no apartment units were completed in Knoxville in the last year. The two most recent apartment properties came online in the first quarter of 2009. As of May, Red Capital Group reports eight apartment projects totaling 1,470 units are planned or proposed. Condo development was also light. No new condo properties are currently under construction and only 457 units are in the planned or proposed phase.
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