Original Debt Terms
Seven-year floating rate debt at 208 basis points over 1-Month LIBOR with two years of interest-only payments.
The prior owner needed its capital returned for its next project sooner than a standard public bid process could accommodate. Knowing RADCO’s credibility to close and its reputation for successfully executing on value-added projects, the seller’s broker came directly to RADCO to negotiate a deal off-market.
In this highly under-amenitized deal, the $3.3 million capital improvements plan included adding a clubhouse/leasing center, fitness center, and dog park, as well as extensive exterior and interior renovations.
At the end of December 2016, revenue had increased 40% and in-place rents had increased 48% following the acquisition.
After a 36-month hold, a refinance allowed RADCO to pay off the existing indenture and closing costs, recapitalize the deal to continue capital improvements, and provide a special distribution to investors of 90.3% of original equity.