Thorofare Capital has funded a $6,945,000 bridge loan for the recapitalization, capital upgrades, and partnership buyout of Jack London Gateway, a 1985-built, 58,557 SF neighborhood shopping center located at 800-900 Market Street in Oakland, CA. The property is well located in West Oakland with additional ingress/egress points along Brush Street and 7th Street, and in close proximity to I-880 and I-980. The property is currently 65% occupied and will be 91% occupied within 9 months once the sponsor-affiliated grocer completes its tenant improvements and opens for business. The current in-place net operating income produces a below-breakeven DSCR, thus Thorofare structured a “delta” interest reserve to support debt service.

The property is well maintained and positioned strategically since there are no competitive grocery stores in the vicinity. Once the grocery store is in occupancy, it is thought that the performance of the inline space will be enhanced and this will result in increased retention of the national tenants – McDonald’s, KFC, and Citi Trends – since the center will have an even healthier visitor draw and tenant mix at 91% occupancy.

Affiliates of the sponsor own the adjacent senior housing property and would like to develop a medical office with ground floor retail on the commercial condo site, which is a build-to-suit 15,000 SF opportunity and part of Jack London Gateway. The sponsor plans to ground lease the vacant commercial condo site, which is also part of the subject property collateral that abuts the shopping center.

The Principals of the sponsorship group, a North Bay-based private investment firm with a significant real estate portfolio, have decades of global experience in the food business, import export, merchandising and distribution with trading partners such as Trader Joe’s, Safeway and Whole Foods.

This financing transaction provided an opportunity for the sponsor to buy-out legacy partners to gain full control of the impending value-add business plan by initiating the grocer launch and proceeding with the build-to-suit project. The new capital stack will provide for the funds essential to the improvement, leasing, and stabilization of the property. Thorofare placed the loan in its third discretionary debt fund, Thorofare Asset Based Lending Fund III, L.P.