Opus Bank’s Structured Finance division provides a $6,015,000 bridge loan to finance the acquisition and renovation of a 38-unit multifamily apartment building in Glendale, CA
Overview of Transaction
- The client saw an opportunity to add significant value to the property by performing renovations and increasing rents relative to the market.
- One of the key challenges to this transaction was that both the borrower and the seller were operating on different timelines for closing with ongoing negotiations throughout the escrow process.
Significance of Transaction
- The client owns other properties in the area and has extensive ground-up construction and value-add investment experience in the surrounding markets.
- The client estimated a $630,000 renovation budget for full kitchen and bathroom remodels, landscaping, pool and BBQ area, new patio furniture, and roof work. Opus Bank (“Opus”) has the local expertise to understand the desirability of the asset in that submarket.
Opus Bank's Role
- Opus provided proceeds based on an “as stabilized” pro-forma post renovation and lease-up.
- The loan was structured with capital renovation holdbacks and contingency amounts.
- The total loan amount of $6,000,000 is 58% of the purchase price. At closing, Opus funded $5,385,000 with multiple advances throughout the loan term. When fully funded, the total loan amount will represent 54% of total project costs. Opus was able to provide the consistent feedback and communication to both parties throughout the time sensitive escrow period to meet the client’s closing schedule.