Bram and Allison Higgins, assistant vice president at Smith, arranged the nonrecourse, 36-month bridge loan, at Libor plus 3.05%. Bram notes that despite the reluctance of many lenders, Smith found a lender that would provide a low-rate loan at 77% of cost.
The lender funded below a break-even debt coverage ratio with an interest reserve to cover the cash-flow shortfall. For the reposition period, George Smith Partners structured a $400,000 debt service reserve.
The borrower plans to complete extensive renovations, as well as implement an aggressive management program to bring rents up to current market levels. The renovation is estimated to cost $1 million.
The property, Mountainside Village Apartments, is located at 1660 Kendall Dr. in San Bernardino, across from California State University. The joint venture of Mountainside Village Apartment Investors and Griffin Investments acquired the complex from Revere Investments of Cerritos, which disposed of it following the completion of Revere's repositioning plan for the asset. The gated community features units of two and three bedrooms, with floor plans ranging from 800 sf to 1,030 sf.
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