Thorofare Capital has funded a $7,650,000 fixed rate bridge loan for the acquisition and renovation of Garden Grove Apartments, a value-add multifamily community located in Montgomery, Alabama. The low acquisition basis, coupled with a strategic overhaul and aggressive leasing plan, will aid the sponsor in achieving stabilized occupancy within an expedited timeframe.

Garden Grove Apartments is a 432-unit, garden-style multifamily community built in 1967 and renovated in the late 90’s. The property is situated on an 18.968-acre site and is approximately five miles southeast of the Montgomery central business district. There are a total of 30 freestanding residential buildings, including two 2-story rectangular buildings. Amenities consist of a leasing office/clubhouse, which contains a meeting room, a basketball court, and a children’s playground.

The non-recourse financing structure included an initial term of 18 months with an extension, and was sized to 75% of the total project capitalization. The loan is pre-payable without penalty, subject to 18 months of yield protection, and requires a construction completion guaranty. Thorofare also structured an interest reserve that closes the gap between in-place NOI and the forecasted NOI upon renovation and lease-up. The bridge loan is interest-only for its full term and interest on CapEx funds accrues only on a pre-determined, mutually agreed upon disbursement schedule.

The sponsor is an affiliate of Strategic Holdings. Strategic is a Camarillo, CA-based privately held investment firm that currently owns in excess of 2,300 multifamily units and is actively acquiring income properties as well as real estate-related assets. Since its formation in 2010, Strategic has acquired in excess of $90 million of value-add commercial real estate and non-performing loans secured by distressed properties.