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PHOENIX-A Tacoma, WA-based condo converter has secured $9.5 million in bridge financing to cover costs for a condominium conversion of the 132-unit Esplanade Apartments.
Metropolitan Development Group landed a two-year loan for conversion of the Esplanade at 740 W. Elm St. through Owens Financial Group of Walnut Creek, Ca. Brian Harvey of Johnson Capital's San Diego office worked out a 75% loan-to-value ratio for the bridge package.
The Esplanade is located just west of Downtown and one of several multifamily properties in the area targeted for conversion by Metropolitan Development. According to Harvey, who is director of Johnson Capital's San Diego office, the converter purchased the property for $7.5 million.
"There's about $3 million worth of conversion costs in this project," Harvey tells GlobeSt.com, "and that's what the loan is for." He says no equity is being pulled out of the property for other acquisitions.
Harvey says Metropolitan Development, which paid approximately $56,000 per unit for the asset, plans to sell 24 one-bedroom units and 108 two-bedroom units for, on average, $135,000 per unit--once conversions have been completed and brought up to code.According to Harvey, the owner converted other multifamily holdings in the metro plus is likely to be purchasing more properties. "They are looking to do more of those," he adds, "and they'll be looking to do more financing, based on that."
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