Repeat multi-family customer expanding rapidly in the Pacific Northwest. Borrower is finding more opportunities than it has equity capital, and wanted a solution that would allow it to continue to grow without bringing on dilutive equity.
Red Fox was able to provide a $6,750,000mezzanine loan that facilitated borrower’s $30,000,000 acquisition of a value-add asset in the greater Seattle market. The structure was a combination of preferred equity (to allow for the placement of a securitized first mortgage) and mezzanine debt at the holding company level.
The takeout for this loan will come through a sale or refinance of the newly acquired asset once rents are moved to market, renovations are completed and NOI is optimized. Given the low cap rate environment, an interim and exit cashflow cushion is provided by the other assets taken as collateral.