Thorofare Capital has funded a $3,300,000 bridge loan for the acquisition, renovation, and lease up 5609-5619 Figueroa Street in the Highland Park neighborhood of Los Angeles, California. 5609 N. Figueroa consists of two separate parcels with a lot measuring approximately 18,655 Sq./Ft. containing a 13,906 Sq./Ft., mixed-use building with retail and 28 single-room occupancy (SRO) residential units. The total project cost is approximately $5,450,000 and includes a two-phase repositioning strategy.

The non-recourse financing, provided by Thorofare, carries an initial term of 15 months with only six months of yield maintenance and is sized to a 13.7% debt yield on stabilized NOI. In addition to the CapEx, tenant improvement and leasing commission holdbacks, Thorofare also funded an interest reserve to cover debt service until the building is stabilized.

The first floor houses the retail space, which is currently occupied by three retail tenants and the second floor is approximately 5,953 Sq./Ft and contains 28 SRO units. There is an additional 400 Sq./Ft garage located at the back of the property. 5609 N. Figueroa offers 36 on-site parking units, highly visible frontage along North Figueroa Street and is within walking distance from the Gold Line Highland Park Station. The property is also adjacent to the proposed Highland Park Transit Village mixed use development project. The Highland Park neighborhood is centrally and only a short distance from Downtown Los Angeles, Glendale and Pasadena. The 110 Freeway is located only minutes away allowing easy access to and from the Property. According to a study in 2013 by online real estate company, RedFin, Highland Park was rated the year’s “Hottest Up-and-Coming Neighborhood” due to the area’s rising real estate value and rapidly changing demographics.

The sponsor plans to spend in excess of $1,000,000 towards upgrading the project in two phases. The first phase will divide and reposition the retail space. Approximately 7,000 Sq./Ft of the ground floor space will be repositioned within the first 6 – 9 months of the acquisition as high-end urban retail space. Thereafter, the second phase of the business plan is to spend $5,000 per unit to convert the roughly 150 Sq./Ft. units into clean, bright and modern micro live-work units. The assumed average rents per unit would be slightly below market, which would be an attractive price for creative tenants such as artists, musicians and students who populate the neighborhood.

The sponsor is a privately held, Los Angeles-based real estate investment, development and management company that is principally focused on urban property development and commercial property management throughout several gentrifying neighborhoods of greater Los Angeles.

Thorofare placed this loan in its Thorofare Asset Based Lending Fund III, L.P., a $250 million discretionary debt fund.