Thorofare Capital has funded a $5,700,000 floating rate commercial mortgage for the acquisition and renovation of Ranmore Apartments, a 32-unit multifamily property located on Rosemead Boulevard in San Gabriel, California. The property is located in the high occupancy (98%) sub-market Arcadia/Duarte/El Monte. Upon acquisition, the sponsor plans improvements to the exterior as well as upgrading interiors as units turn. The sponsor will increase rents to market and remove a number of Section 8 tenants that are currently occupying the property.

The non-recourse, interest-only financing was sized to 78% of total project capitalization. The loan carries a three year term including two extensions, was priced at a competitive spread over the 30-day LIBOR, and does not require amortization. Thorofare structured a Debt Service Reserve in order to cover the shortfall between current net cash flow and debt service payments. Additionally, the structure included a Capital Expenditure Reserve to fully capitalize the sponsor’s value-add business plan.

Ranmore Apartments is a two-story multifamily complex, which was constructed in 1962 on an approximately ¾ acre lot, with a total building size of approximately 20,456 square feet. The 32-unit property has been well maintained and is separately metered for gas and electric, and offers an on-site laundry facility, swimming pool, carports and mature landscaping. The unit mix consists of 14 1BR/1BA units and 18 2BR/1BA units. The units are renovated with crown molding, travertine style flooring in the kitchen and bathrooms, wood laminate flooring, granite countertops, new kitchen cabinets, and ceramic tile showers.

The sponsor is a Los Angeles-based private real estate investment firm specializing in multifamily residential properties with a focus of supply constrained, in-fill West Coast markets. The sponsor focuses on value-added acquisitions and currently owns over 200 multifamily units in the greater Los Angeles area. The third party management company, Maschole Property Management, currently manages approximately 100 apartment communities totaling more than 3,000 units.