Seasoned self-storage and multi-family owner/operator with a focus on acquiring and repositioning smaller, underperforming assets throughout the Southeast is acquiring a 17-building site currently operating as a multi-tenant retail center and a self-storage facility. Borrower is purchasing at a low cap rate with expectation that rents (retail and self-storage) are currently well below market. Unique property in a small market limits financing options available to the Sponsor.

Southeast Bridge Capital agreed to provide 42.5% LTC on the acquisition, with performance-based earnouts to provide up to 60% of total cost (58.5% LTV). Loan term is 18 months to allow ample time to re-tenant & increase rents. Current income will provide 7.2% debt yield on the loan at closing. Proforma NOI provides a 10.5% debt yield on the full committed amount.

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Borrower will seek to refinance and hold the property once stabilized. Proforma NOI of $215K will support roughly $2.45MM in permanent financing assuming 5% rate, 1.25 DCR and a 20-year am. The earnout structure mitigates Lender exposure. Southeast Bridge will have a 7.2% debt yield with in-place income, and a 12.7% DY at Proforma income before earnouts funded.​