Thorofare Capital has funded $8,300,000 in acquisition financing for a sub-performing loan portfolio with an aggregate outstanding principal balance $8.3 million. The distressed debt portfolio is collateralized by five properties in metro Phoenix. The underlying borrower/owner was overleveraged and undercapitalized, resulting in neglected and cash deprived properties. The sponsor is a Denver-based private investment firm specializing in commercial property development and management.

The first property, Camelot, is a 188-unit apartment property located on Camelback Road in Phoenix. Camelot is located two blocks from a light rail stop. The property was built in 1970 with block construction and encompasses approximately 2.75 acres. Camelot is comprised of studio and 1-bedroom units. The property is currently under-performing its competitive market, with rents below market and vacancy higher than market at 20+%.

The second property, Broadmill, is a 40-unit apartment property located on Broadway Road in Tempe, within one mile of the Arizona State University campus. The property was built in 1965 and is comprised of 14 one-bedroom units and 26 two bedroom units. The borrower plans extensive improvements to the property of $12,000 per unit and projects significant return through capital improvements, rental growth, and increased occupancy. Due to proximity to Arizona State University, as well as a concentration of technology employment, Tempe continues to be a favored investment location in the Phoenix market.

The third property, Pleyton Plaza, is a 19,000 sq./ft. office building located on North 16th Avenue in Phoenix, Arizona. The property is a small tenant office building with 34 separate suites. Most of the current tenants lease on a month-to-month basis and the property is 50+/-% occupied. The in-place leases average $12+/- per sq./ft. gross, while comparable properties lease closer to $16 per sq./ft.

The fourth property, Val Vista, is a 4.59 acre vacant residential land parcel near the corner of Val Vista Drive and Brown Road in Mesa, Arizona. Val Vista is part of the larger Oasis Grove subdivision and under the R1-35 zoning district, which accommodates a low-density, suburban estate type residential uses in areas with unique characteristics. Multiple high-end homes surround the subject site, on lots up to five acres. Val Vista’s zoning allows a re-subdivision into as many as five lots.

The fifth property, Main Street, is a 5.24 acre vacant commercial land parcel located at the corner of Main Street and 54th Street in Mesa, Arizona. The property is comprised of two contiguous parcels and has 770 feet of frontage along Main Street, a major arterial street. The C-2 zoning district provides for a wide range of indoor retail and other commercial businesses. The district guidelines satisfy the needs of the community with an emphasis on shopping center and group commercial developments.

This distressed debt acquisition opportunity represents the opportunity for the sponsor to acquire a diverse portfolio of properties in a strengthening market at prices substantially below the replacement cost for the multifamily and office properties and considerably below fair market value for the land parcels. The multifamily properties and office properties are located in highly desirable locations with a significant value add component through capital improvements, leasing, and efficient management. Minimal risk allocation was concentrated on the land parcels, which both carry a high disposition priority for the sponsor.