Commercial Property Value Add02/18/2021
RRA Capital, a direct private lending firm, funded a $9.7M bridge loan for the purchase of an apartment complex in Montgomery, Alabama. Built in 1977, the 14-acre property is 82% occupied and consists of 200 units spread across 25, two-story buildings. It has a mix of 96 one-bedroom, 72 two-bedroom, and 32 three-bedroom units. The sponsor plans to immediately undertake a significant renovation program to improve both unit interiors and exteriors to make the necessary improvements to cycle rents to market. There are currently 33 down units with structural issues related to drainage. A portion of the capital improvement budget will be allocated to remedy this issue and bring the units back online. RRA Capital provided a $9,660,000 non-recourse, 24-month interest-only loan, with two, 6-month extension options. The loan includes a capital improvement holdback to cover budgeted renovations as well as reserves to cover expenses prior to stabilization.