Opus Bank’s Structured Finance division provides a $7,500,000 bridge loan for the acquisition and renovation of a 74 unit multifamily property in Tualatin, OR
Overview of Transaction
- Opus Bank’s (“Opus”) primary client is a professional real estate investor and syndicator with over 30 years’ experience executing value-add business plans in and around Portland, Oregon.
- The client had recently sold a property and was looking to exchange into a new property while maintaining a Tenant-in-Common (“TIC”) borrowing structure.
- The client had identified a well located property that was 100% occupied but needed interior and exterior improvements to maximize value. The property’s rents were below market due to the dated appeal and condition.
- Based on traditional lender underwriting the client’s exchange proceeds would not have been sufficient to complete the acquisition.
Significance of Transaction
- Opus’ client owns and manages multiple multifamily investment properties in the Portland area.
- This direct ownership and management experience helped them to estimate that a $1,500,000 capital renovation budget was necessary in order to bring the subject to market. The $20,300 per unit renovation plan was split roughly 60/40 between the exterior and interior and included modernizing the exterior with siding accents, paint and improvements to the landscaping and signage, as well as improving units with new countertops, fixtures, and flooring.
Opus Bank's Role
- The mortgage broker knew that the Opus Bridge Lending program was a perfect fit for the client’s needs.
- The total loan amount of $7,500,000 was 88% of the purchase price with loan proceeds based on as-renovated rents. The loan was also structured with interest reserves, capital renovation holdbacks as well as contingency amounts.
- At closing, Opus funded $5,935,000 with future advances to be made monthly as costs were incurred. When fully funded, the total loan amount will represent 72% of total project costs.