$32,250,000 High Leveraged Bridge Loan of Multi-State Apartment Portfolio Bryan Shaffer successfully placed the $32,250,000 senior bridge loan for the refinance of a two property 397 unit multifamily apartment portfolio for a family trust. The highly leveraged loan took debt coverage to 1.05 and allowed the family trust to pay off ballooning debt and secure over $1,000,000 in rehab dollars. The Sponsor also received a return of equity on his investment. Sized to 85% of current value, the non-recourse debt floats at 5.25% over LIBOR and is interest only for the two year term.
Challenge: As single stand-alone assets, neither property would qualify for additional debt; one property restricted by debt service coverage and the other having LTV restrictions.
Solution: GSP mapped out the future upside in the portfolio and developed a plan to structure the assets together as a portfolio, reducing the overall risk of the loan and providing better overall coverage and cash flow for the lender. Monthly cash flow after debt service increased with the lower interest-only payment and the ownership is provided the capital needed to complete the rehab plan and increase the rents on the projects. A self-imposed Borrower capital reserve was funded to absorb market changes until the assets are fully stabilized and will qualify for permanent debt.