Commercial Property Value Add03/15/2018
$14 MM Senior bridge loan secured by a 600-unit apartment community in Houston, Texas. The loan proceeds will fund the refinance of existing debt and a significant capital improvement plan. At closing, the property was 35% occupied with the remaining units in un-rentable condition. Despite the property’s poor physical condition, the asset presented the owner with an opportunity to capitalize on the strong apartment fundamentals in the surrounding area. The loan was structured to include an initial advance which would allow the borrower to complete a significant portion of their plan immediately. The loan also included additional funds in the event the project costs exceeded the budget. Due to a complex history, ownership had limited cash equity in the project. BridgeInvest was able to accommodate a high loan-to-cost on the entire project, with the borrower contributing $2.15 MM of equity to execute on their business plan. Considering the property’s poor condition, the capital improvement plan makes up approximately one-third of the loan proceeds, making the loan difficult for traditional lenders to underwrite. However, BridgeInvest understood the borrower’s business plan, which should result in a “like-new” product and allow the property to stabilize. This loan was funded in March 2018.