Inland Mortgage Capital, LLC (“IMC”) is pleased to announce the closing of a $9,000,000 non-recourse bridge loan with a four-time repeat Borrower.
The proceeds will be used for the acquisition and renovation of a 34-unit apartment complex in Long Beach, CA. The Borrower has had considerable historical success in Long Beach, with IMC funding two previous value-add opportunities there.
The Borrower’s business plan entails interior and exterior renovations. Currently, 31 of the 36 units have had partial interior renovations and have variations in countertops, updated appliances, and flooring, which were started in early 2019. With the new updates, the units will all have identical new cabinets in both the bathrooms and kitchens, fresh paint, new vinyl plank flooring, stainless-steel appliances, and quartz countertops and backsplashes. The exterior was not renovated, which severely reduced curb appeal. Exterior renovations will include new lighting, laundry facility improvements, exterior paint, and an upgraded courtyard area. The five units not yet renovated will get a thorough overhaul.
With the complex being 86% occupied at closing, as leases expire, the Borrower will re-lease the updated units with increased rents.
Even with the current project having less extensive renovation needs than normal, and a statewide California rent control law that went into effect right before closing, IMC saw the opportunity to close with an extremely experienced and proven Borrower. This Borrower has outperformed IMC’s pro forma rents at the two previously closed multifamily properties (a third project is in the midst of its renovations). Additionally, the property is well-located, just 23 miles south of downtown Los Angles, 0.5 miles from the Los Alamitos Circle, and 1.8 miles from Junipero Beach.
As is typical, IMC requires no prepayment protection, affording the Borrower flexible access to credit markets upon completion of its business plan.
