BridgeInvest Closes $14.0 MM Rehab Loan for 600-Unit Apartment Community

Southeast focused real estate lender, BridgeInvest, closed a $14.0 MM first-priority loan secured by a 600-unit apartment community in Houston, Texas. The loan proceeds will fund the refinance of existing debt and a significant capital improvement plan. At closing, the property was 35% occupied with the remaining units in un-rentable condition. Despite the property’s poor physical condition, the asset presented the owner with an opportunity to capitalize on the strong apartment fundamentals in the surrounding area.

Transaction Highlights

Flexible Structure
The loan was structured to include an initial advance which would allow the borrower to complete a significant portion of their plan immediately. The loan also included additional funds in the event the project costs exceeded the budget.

Value-Add Upside
Considering the property’s poor condition, the capital improvement plan makes up approximately one-third of the loan proceeds, making the loan difficult for traditional lenders to underwrite. However, BridgeInvest understood the borrower’s business plan, which should result in a “like-new” product and allow the property to stabilize. 

Tailored LTC Requirements
Due to a complex history, ownership had limited cash equity in the project. BridgeInvest was able to accommodate a high loan-to-cost on the entire project, with the borrower contributing $2.15 MM of equity to execute on their business plan.

Reliable Funding
BridgeInvest continues to build a strong reputation in Texas with its proven ability to close transactions on a timely basis through its discretionary fund structure that allows borrowers to execute on their business plans.