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.
The property is a 1972 Vintage garden-style multifamily asset consisting of 176-Townhomes.
The sponsor specializes in multifamily investments in Southwestern markets with over 50 years of combined experience and a total over $30MM AUM.
- 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.
- 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.
- Total Cap Stack (LTC): > 85%
- Return: 13% (7% preferred 6% accured)
- Term: 36 months with Two 1-Year Extension options