Berkadia Secures $26M Cash Neutral Refinance for a High-Rise Conversion Project in the Heart of Downtown Tucson, Arizona
Scottsdale, Arizona – May 27, 2025 – Berkadia, a distinguished leader in the commercial real estate sector, announced today the refinancing of Redondo Tower, a 96-unit high-rise residential condominium property located in downtown Tucson, Arizona. Senior Director Vin Basa of Berkadia Scottsdale successfully secured a $26 million cash-neutral refinancing through a debt fund on behalf of the owner, California-based Vertical Street Ventures. The deal closed on May 19.
The condo inventory loan featured a full term interest only schedule and was sized 65% loan-to-value based on the total market value of the residential condos.
While apartment values have struggled in the past several years, single family home values have remained steadfast through an uncertain marketplace due to constrained supply, especially in the downtown area of Tucson. After exploring various exit strategies, owner Vertical Street Ventures strategically decided to convert Redondo Tower to condominiums, with an objective to deliver the highest and best returns for their investors.
“It was a challenging decision, but we prioritized the best interests of our investors. We chose to partner with Vin Basa at Berkadia due to his extensive expertise in creative financing solutions. Vin and his team impressively closed this deal within 40 days,” remarked Kyle Mitchell, Managing Member of Vertical Street Ventures.
“The market continues to evolve – as apartments struggle to retain or grow value in the face of higher interest rates and slower growing rental income, some apartment properties are better suited to exit as condominiums, which can be a mutually beneficial solution in areas with housing supply constraints and or lack of affordability. Redondo Tower checked a lot of boxes for viability as a condo exit, so that path was ultimately selected,” says Joseph Dietz, consultant to the project on behalf of Vertical Street.
“We were able to timely deliver an attractive financing solution to facilitate the condominium exit strategy,” said Basa. “This required us to evaluate and analyze the property from a condominium exit perspective, which requires a separate financial model than apartments.”
Originally constructed as condos in 1961, Redondo Tower has recently operated as an apartment complex.
Located at 425 W Paseo Redondo, this property offers an iconic mid-century modern high-rise experience, 96 fully renovated residential units, as well as four additional business units. Residents will enjoy high rise residential living with strong amenities, quick access to the Sun Link Streetcar to the University of Arizona, as well as a plethora of cultural, dining, entertainment and retail opportunities within walking distance in downtown Tucson.
For more information on the Redondo Tower condominium project, please refer to links below:
- www.RedondoCondoTucson.com
- https://www.facebook.com/redondocondos
- https://www.instagram.com/downtowntucsonliving/
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