Fast growing Pacific Northwest asset management firm looking to continue to expand its portfolio of value-add multi-family deals in the region. Borrower wanted a solution to expand its asset base without diluting its ownership position in the acquisition target.
Red Fox provided higher than normal acquisition leverage in exchange for a slight pricing premium and an assignment of borrower’s partnership interests in other stabilized properties in its portfolio. Red Fox was able to provide a quick and easy solution that will ultimately lead to much higher equity returns for the borrower.
The takeout for this loan will come through a sale or refinance of the asset once rents are moved to market and NOI is optimized. Given the low cap rate environment, an interim and exit cash flow cushion is provided by the other assets taken as collateral.