The challenge after most units have sold
Selling most of a condominium project can still leave a developer carrying debt, taxes, HOA obligations, maintenance, marketing expenses, and other costs on the remaining inventory. The project may be successful overall while cash is temporarily tied up in unsold units.
A bulk inventory refinance can replace existing debt and potentially release equity, giving the developer more time to sell the remaining units thoughtfully rather than accepting distressed pricing.
- Pay off eligible existing project debt
- Access qualifying equity from remaining units
- Support carrying obligations and reserves
- Create capital for another eligible business-purpose project
Why bulk condominium collateral is difficult
Twenty condominium units are not the same collateral as one 20-unit apartment building. Each condo may have its own legal description, title record, valuation, taxes, HOA obligations, and potential release price when it is sold.
The lender also evaluates market absorption, concentration, total inventory, sales history, current listings, lease status, borrower experience, and how individual unit sales will reduce the blanket loan balance. Those layers make the transaction more specialized than a standard commercial refinance.
Edison Midtown: 20 units refinanced within a 60-unit project
At Edison Midtown, 3131 N Central Ave in Phoenix, the developer had sold 37 of the original 60 condominium units and had 23 remaining. He had limited documented reserves while an aircraft-hangar interest owned with partners was still being sold. Ahoo refinanced 20 of the individually titled condo units together at approximately 75% LTV.
Rather than making the transaction depend on completion of the hangar sale, the lender permitted an eligible portion of the refinance cash-out proceeds to establish the required post-closing reserves. The remaining liquidity helped support project obligations and the developer’s next project. The goal was not simply a new rate—it was creating breathing room and a path forward from valuable remaining inventory.
What to prepare for an inventory refinance
A lender will need a precise unit schedule and a complete view of the project. The request becomes stronger when the developer can document prior sales, remaining values, liens, carrying costs, current leases or listings, and the business-purpose use of cash-out proceeds.
- Unit-by-unit address, title, value, occupancy, and payoff schedule
- Original project size and completed sales history
- Current appraisal or valuation support
- HOA, insurance, taxes, and operating obligations
- Requested loan amount and proposed release prices
- Clear use of funds and repayment or unit-sale strategy
Related questions
Is this the same as refinancing a 20-unit apartment building?
No. Individually titled condominium units usually require more title, valuation, release, HOA, and collateral analysis than one apartment-building parcel.
Can the refinance provide cash for another project?
Potentially. Eligible commercial cash-out proceeds may support another business-purpose project when the collateral, leverage, borrower, and documented use of funds satisfy lender requirements.
Can commercial cash-out proceeds be used for required reserves?
Sometimes. In this transaction, the commercial lender permitted an eligible portion of the cash-out proceeds to establish required post-closing reserves. Treatment varies by lender; some conventional residential guidelines prohibit using subject-property cash-out proceeds as reserves.
Is 75% LTV available on every condo-inventory refinance?
No. Approximately 75% LTV was achieved in this specific transaction; future leverage depends on the units, market, sales history, value, loan purpose, borrower, and lender approval.