How to Refinance a Stabilized Property: A Guide for Real Estate Developers

What is a Stabilized Property?

A stabilized property is one that has moved beyond construction or lease-up and is now generating steady income. For lenders and investors, this signals that the property is lower-risk and eligible for better financing options. Stabilization can apply to both residential and commercial properties, and typically reflects consistent operations, occupancy, and income performance over time. Real estate developers typically meet stabilization criteria when:

• Occupancy reaches 90 percent or higher. This level of resident or commercial occupant retention demonstrates strong market demand and effective property management, reducing concerns about vacancy risk.
• Net operating income (NOI) is consistent. NOI reflects the property’s actual performance. A 12- to 24-month track record of steady income shows that the property is no longer volatile and can cover its operating costs and debt service.
• The lease-up period is complete. A property in lease-up may still be unpredictable. Once stabilization is achieved, rent rolls or lease revenues are steady, tenant turnover is minimal, and collections are reliable (source).

Stabilization is not just a financial milestone, it also marks a shift in how the property is positioned. It becomes a long-term asset rather than a development in transition.

Stabilized vs. Unstabilized Property: What’s the Difference?

Understanding the difference between stabilized and unstabilized properties helps clarify when refinancing becomes viable, and why timing matters.

• Unstabilized properties are in an earlier phase of development, often still undergoing lease-up or achieving initial occupancy. They may not yet have a reliable income stream, and therefore present greater risk to lenders.
• Stabilized properties have proven income performance and high occupancy levels. These assets are more appealing to lenders and investors due to lower volatility and more predictable returns.

If developers are unsure where their property stands, reviewing occupancy trends and financials over the past 12–24 months can help determine whether they have reached stabilization.

How to Refinance a Stabilized Property: What Real Estate Developers Need to Know

Refinancing a stabilized property can improve long-term financial health and free up resources for other priorities. Real estate developers often refinance to replace higher-cost construction or bridge loans with more sustainable, permanent debt.

• Refinancing offers more favorable terms. Once a property is stabilized, developers typically qualify for lower interest rates, longer loan durations, and amortization schedules better aligned with operating cash flow. These terms improve financial predictability and reduce pressure on monthly budgets.
• “As stabilized” value creates opportunity. A property’s value after stabilization, known as its “as stabilized” value, is based on actual income performance, not projections. This can increase the property’s appraised value, enabling developers to access equity, reduce loan-to-value ratios, or secure better loan pricing.
• Capital Impact Partners customizes refinancing solutions. Capital Impact Partners works with real estate developers to structure refinancing that reflects project goals and community impact, not just balance sheets. We understand the complexities of affordable and mixed-use projects and offer flexible capital to meet long-term needs.

Why Property Stabilization Matters in Real Estate Finance

Stabilization isn’t just a status, it’s a turning point in a project’s life cycle. In real estate finance, it determines how lenders view risk and how capital is priced and structured.

• Stabilized properties are considered lower-risk. Lenders prefer working with stabilized assets because they demonstrate consistent revenue and operations. This reduced risk can unlock more competitive financing terms and expand lending options.
• It allows for more strategic financial planning. Developers with stabilized assets can move beyond reactive financing. With more predictability, they can plan for future investments, debt service, reserves, or property improvements with greater confidence.
• It strengthens a developer’s track record. Successfully stabilizing a property shows a lender that the developer can deliver and operate a financially sound project. This can help build credibility and improve access to capital for future deals.

At Capital Impact Partners, we support real estate developers during and after stabilization, offering refinancing tools to sustain long-term ownership and preserve community value.

When & How to Refinance a Stabilized Property

Many real estate developers begin exploring refinancing options as soon as stabilization is achieved, but timing and preparation still matter.

• Post-stabilization is the right window. Once a real estate developer has achieved reliable occupancy and NOI, they may be able to secure a more favorable loan that aligns with the property’s current value, not its projected potential. This is when the “as stabilized” value truly matters.
• Key triggers include debt maturity and market opportunity. Developers often refinance when an interest-only construction loan is set to expire or when interest rates drop and the property is in a strong financial position.
• Steps to take before refinancing:
  • Analyze NOI over the past 12–24 months.
  • Assess current interest rates and available products.
  • Gather documentation: rent rolls, financial statements, maintenance reports, and updated appraisals.
  • Partner with lenders like Capital Impact Partners who understand the goals of a community-rooted developer and can offer tailored refinancing solutions.

How Capital Impact Partners Supports Stabilized Properties

As part of the Momentus Capital branded family of organizations, Capital Impact Partners provides refinancing solutions that are flexible, responsive, and designed to meet the needs of real estate developers advancing community-focused projects.

• We provide long-term, fixed-rate financing that supports developers in maintaining ownership of stabilized assets.
• Our team has deep experience working with affordable housing, mixed-use, and commercial projects across markets.
• We don’t just provide capital, we work with developers to understand their project’s context and provide financing that fits their goals, timelines, and community priorities.

Refinancing a Stabilized Property in Action: Woodland Ridge Apartments

Refinancing a stabilized property isn’t just about improving loan terms. It can also free up critical resources to support long-term community goals. A recent example from Capital Impact Partners shows how refinancing stabilized real estate can strengthen a developer’s financial position while deepening local impact.

In San Antonio, Texas, Capital Impact provided a $10 million loan to refinance existing bank debt on Woodland Ridge Apartments, a stabilized 150-unit affordable housing community. The property serves individuals and families earning 60 percent or less of the area median income, meeting a critical need for attainable housing.

The borrower, Alamo Community Group, is a nonprofit affordable housing developer that also provides resident support services. By refinancing with Capital Impact Partners, the organization replaced higher-cost private debt with more flexible and reasonably priced financing.

As a result, Alamo Community Group was able to:

• Reduce financial pressure through improved loan terms
• Strengthen its balance sheet for long-term ownership
• Continue providing affordable housing and services for a population living with low incomes

This case highlights how refinancing a stabilized property can help real estate developers preserve affordability, maintain financial stability, and reinvest in community outcomes.