Opus Bank is pleased to announce it provided:
- Title: Bridge Loan
- Amount: $13,800,000
- Month: May
- Year: 2016
A family-run real estate investment company with over 15 years of experience improving and operating multifamily properties in the San Francisco Bay Area was looking to re-invest 1031 exchange proceeds and had identified a well-located property that was 100% occupied but in need of interior and exterior improvements to maximize its value. Due to the property’s dated appeal and condition, it lagged submarket rents and based on traditional lender underwriting, our client’s proceeds would not have been sufficient to complete the acquisition.
The bulk of our client’s portfolio is located a short distance from the target property. The client relied on his local market knowledge and expertise to estimate the upside potential as well as the costs necessary to unlock the potential. The budget to improve the property totaled $1,150,000 with the bulk of the budget devoted to renovating unit interiors. As the property did not have breakeven debt coverage going in, a $200,000 interest reserve was established to fund shortfalls.
The mortgage broker engaged for this assignment was familiar with Opus’ bridge lending program and felt that the program would fit the client’s needs well. Loan proceeds were based on as-renovated rents, and the loan was structured with soft and hard cost holdbacks as well as contingency amounts. The total loan amount of $13,800,000 represented 74% of the purchase price. At closing, Opus Bank funded $12,650,000 with advances made monthly as costs were incurred. When fully funded, the total loan amount will represent 70% of total project costs.