Opus Bank is pleased to announce it provided:
- Title: Bridge Loan
- Amount: $4,900,000
- Month: September
- Year: 2018
Our clients are repeat borrowers of Opus Bank (“Opus”) and professional real estate investors with experience in executing value-add business plans in the Pacific Northwest and San Francisco Bay Area. The clients had identified a conveniently located property that was in need of largely cosmetic improvements to effectively compete. The rents lagged the submarket and based on traditional lender underwriting the requisite equity required to complete the acquisition would have resulted in diluted returns.
The clients’ extensive portfolio in and around the subject’s area helped to estimate upside potential as well as the costs necessary to unlock the potential. The hard cost budget to improve the property totaled a modest $275,000 with the bulk of the budget devoted to exterior and common areas. With the expectation of rising interest rates the client wanted to lock in a low fixed rate but also desired the ability to draw for capital improvements.
Opus’ five year A/B fixed rate bridge lending program fit the clients’ needs perfectly. For this loan proceeds were based on as-improved rents and the loan was structured with a hard cost holdback as well as a contingency amount. The total loan amount of $4,900,000 represented 75% of the purchase price and 71% of total project costs. At closing, Opus funded $4,625,000 (the fixed rate “A Tranche”) with future advances to be made monthly as costs are incurred (the floating rate “B Tranche).