Thorofare Capital has funded a $3,100,000 bridge loan for the acquisition and renovation of Azalea Court Apartments, a 1978-built, 9-building multifamily community consisting of garden-style 2-story structures with a gross building area of 115,700 SF and average unit size of 727 SF. The units are all separately sub-metered and amenities include a community swimming pool and two laundry facilities.

The financing carries an initial term of 1.5 years and a flexible pre-payment structure. To meet the sponsors impending deadline for a year-end closing, Thorofare structured and funded the bridge loan in just 15 days from application.

The property previously suffered from absentee out-of-state ownership and lack of reinvestment towards common arrears, unit interiors, and overall curb appeal, which left the property in a physical condition inferior the market subset. Thorofare provided additional funds for capital improvements at an average of $2,300 per unit, a hybrid payment reserve for partial debt service shortfalls pending stabilization, and $500,000 advanced towards a reserve that will be immediately utilized to rebuild 16 “down” units.

With lack of new construction and the current demand drivers associated with the Freeport submarket, the Galveston/Brazoria submarket currently benefits from ~90% occupancy. This acquisition and renovation opportunity provides the sponsorship with an attractive cost basis and strong potential for improved revenue through moderate renovations to justify increased rents, as the current rents are nearly 20% below market level for similar unit types.

Affiliates of the sponsor own and operate in excess of 1,000 multifamily units across 14 properties in Texas, including a 192-unit multifamily property within 20 minutes of Azalea Court. The Principals of the sponsor have been investing in value-add multifamily transactions since 1981.

Thorofare placed the loan in its third discretionary debt fund, Thorofare Asset Based Lending Fund III, L.P.