Thorofare Capital has funded a $2,094,600 fixed rate bridge loan for LK Realty Group to acquire Laurel Mill Apartments, a value-add 99-unit multifamily property located at on Whites Mill Road in Decatur (Atlanta), Georgia. The sponsor acquired the REO property to upgrade the exteriors, improve common areas, and execute an interior “modernization” program. With a well-capitalized renovation budget, the sponsor plans on remediating the deferred maintenance, revamping the property’s appeal within the rental community, and maximizing value potential through strong management and efficient operations.

Laurel Mill features two-story and three-story construction with an amenity package that consists of a standalone clubhouse/leasing office and a large swimming pool. The property has a desirable unit mix composed entirely of two-bedroom/ two-bathroom and three-bedroom/two-bathroom garden style units, and also three-bedroom/two-and-a-half-bathroom townhome floorplans that average a generous 1,044 square feet. All units are equipped with full size washer & dryer connections and all electric utilities, making these units competitive with those at younger properties. The property is adjacent to the south side of Interstate 20, just across Whites Mill Road. The asset’s high-profile location next to the interstate allows seasonal visibility, exposing Laurel Mill to more than 133,000 cars daily. While neighboring a major interstate with immediate access to two interchanges, Laurel Mill’s surrounding neighborhood has attractive single family homes, giving the area a gentrifying appearance and quiet residential setting. The property is easily accessible to over 3 million square feet of retail space at The Gallery at South DeKalb, North DeKalb Mall, and the Mall at Stonecrest.

The sponsor plans to invest $1,200,000 ($12,120/unit) in capital expenditures to improve the exterior and bring 45 “down” units back into the rental inventory. 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. The acquisition and renovation financing structure included an initial term of one year with an extension, and was sized to 75% of the total project capitalization. Thorofare also structured a “hybrid” 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, LK Realty Group, currently manages in excess of 500 multifamily units and numerous single family houses that have been previously been foreclosed on and sold as bank owned (REO’s). The sponsor also benefits from an in-house management firm that manages all of its principal investments as well as providing third party management services for select investor clients.