Multifamily Construction
$45 Million Multifamily Construction Loan Project – 106 Units
Challenge:
To secure and fund a 106-unit multifamily construction loan in Florida. The first phase of the project (53 units) was built many years ago and is currently 100% leased, but the city would not allow the parcels to be separated into two parcels, so both phases exist on one parcel eliminating the possibility of bifurcating the loan. The second phase (also 53 units) was funded about 18 months ago. The construction project ran into three major problems: (a) SOFR increased about 400 bps from where it started, there was about $1.4M in change orders, and the project is simply taking longer to complete than originally anticipated. These three items caused the perfect storm and a shortage of about $1.6M. Much to the borrower’s disappointment, the existing lender refused to upsize the loan. So, the borrower reached out to Assets America®; we have been requested to find new construction money to pay off the existing lender, and to increase the amount to cover the overages and the new points for the new loan increasing the LTC to above market standards.
Solution:
Assets America® used one of its relationship funding partners to place the high LTC funding request. We are waiting for the deal to be fully underwritten and a final decision to be made. Once the construction loan is funded, and the certificate of occupancy is obtained, and once the property has reached 90% occupancy for 90 days, then Assets America® will take out the new construction loan with permanent financing at market rates…approximately January 2025.