Opus Bank is pleased to announce it provided:
- Title: Bridge Loan
- Amount: $6,000,000
- Month: May
- Year: 2016
Opus Bank (“Opus”) provided a $6,000,000 bridge loan to finance the acquisition and renovation of an existing, mixed-use property, with 25 apartment units over 4,132 square feet retail space. The sponsors are experienced value-add investors specializing in the Seattle multifamily market. The subject is a well located infill property within a strong and improving neighborhood. The apartment units were leased at rents well below current market rates.
The sponsors were repeat clients of Opus’ Income Property Banking division, and this was an opportunity to expand the relationship. To capture the higher market rents, the business plan included an interior renovation of all units, then raising rents to market rates. Opus has the local knowledge needed to understand this opportunity and structure the appropriate loan. Opus was able to look past the current income and underwrite the projected, stabilized income of the property.
Certainty of execution was critical for the client, given this was an acquisition, and Opus successfully closed the loan within the required timeframe. The initial funding was approximately $5,390,000, which was 72% of the purchase price. Future renovation funding of $610,000 is available via monthly draws, comprised primarily of $18,000 per apartment unit for interior upgrades. Given the units will be upgraded as leases rollover, and the property was currently generating above break-even cash flow, no interest reserve was required. When fully funded and stabilized, the loan will represent approximately 74% Loan to Cost and 59% Loan to Value.