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3/10/17
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Continental Partners has arranged $5.3 mil in bridge to mini-perm financing for a 7.5k sf, value-add office building located in the financial district of downtown San Francisco. The property will be converted into multifamily micro-units.
The sponsor intends to invest nearly $2.2 mil to perform a complete gut rehabilitation of the office building. Planned improvements include partitioning the space into micro-units, and completing modern finishes that will appeal to millennial renters in this market.
Continental Partners’ Eugene Rutenberg secured the loan from a regional bank to finance the total project cost of approximately $7.54 mil. The bridge loan was sized to 103% of the purchase price, with a loan-to-cost leverage ratio of 71%. It includes a $300k interest reserve to cover the debt service shortfall during the renovation period, with the commitment based on a $9 mil stabilized value. Upon stabilization of the property, the lender will drop the interest rate approximately 100 basis points and amortize the loan over 25 years for a period of four years after the initial 12-month term.
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