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Multifamily – Preferred Equity

SOUTHWESTERN, US

$5,900,000

SOUTHWESTERN, US

 

Funding Purpose

Provide equity as sponsor was assuming existing inancing. This was Sponsor's largest acquistion to-date and was looking for an equity partner to help them grow their portfolio. 

Property Description

The property is a 1972 Vintage garden-style multifamily asset consisting of 176-Townhomes.

Sponsors

The sponsor specializes in multifamily investments in Southwestern markets with over 50 years of combined experience and a total over $30MM AUM.

Challenges

  • Economic impact of COVID created an uncertainty around rental rates, increase in vacancy, and delinquent rent.
  • Short timeline to close the property before end of year 2020.
  • Needed to assume a Senior loan.

Solutions

  • Tauro was able to get creative with the sponsor and equity partner to find a solution to fill the capital stack.
  • Terms allow for budget increase if unexpected costs or rent delinquencies arose (Projected Levered IRR 30%)
  • Worked diligently will all parties to accommodate short closing timeline.

Funding

  • Total Cap Stack (LTC): > 85%
  • Return: 13% (7% preferred 6% accured)
  • Term: 36 months with Two 1-Year Extension options


Paul Davidovac

Paul Davidovac

TITLE

Director, Capital Advisor

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