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Thorofare Capital Provides Financing for Acquisition of Distressed Debt Portfolio
Financing collateralized by office and multifamily assets in New Jersey, Alabama and South Carolina closed in two weeks from application.
The New Jersey office properties, commonly known as Pennington Point East and Pennington Point West are two adjacent office complexes totaling 29,655 square feet in the Borough of Pennington, 20 miles north of Trenton. Situated on a 2.96-acre site, Pennington Point East is a two building, 15,010 sq./ft., two-story multi-tenant suburban office complex located on Route 31 North. Pennington Point West, situated on a 3.13-acre site, is a two-building 14,760 sq./ft., two-story multi-tenant office complex located on Tree Farm Road. Both complexes were built in 2000 and were collectively 71% occupied by a total of 12 tenants at closing. The sponsor plans on taking fee-simple ownership through a deed in lieu and marketing the remaining vacant suites to local and regional tenants.
“We determined that the price point allocated to each asset was significantly below replacement cost, delivering a substantial current income on in-place net operating revenue, and presenting upside through capital improvements and leasing,” said Thorofare Senior Vice President Felix Gutnikov.”
Additional collateral includes two delinquent loans secured by Pine Ridge Apartments and Williamsburg Apartments, two stabilized multifamily properties in the northeast Alabama town of Gadsen. The sponsor purchased the loans and subsequently secured fee-simple ownership through a court-approved deed in lieu in bankruptcy proceeding. The sponsor has since taken over asset management and has listed both properties for sale with Hendricks-Berkadia. Built in 1979, Pine Ridge Apartments comprises 13 garden-style buildings containing 112 apartment units and was 91% occupied at closing. Williamsburg Apartments is a 10-building, 60-unit apartment building built in 1973 and was 90% occupied at closing.
The final asset in the distressed debt portfolio is a delinquent loan secured by Collins Park Apartments, a 13-building, 104-unit multifamily community located on Dewsbury Lane in North Charleston, SC. The 1983-built property was 92% occupied at closing. The loan was originated in September 2003 and was transferred to special servicing in September 2011, with the last payment being made in November 2011.
Thorofare worked in tandem with the sponsor to streamline due diligence and closed transaction closed in just two weeks from application. The flexible note financing structure allowed for release pricing on each asset and minimum yield protection, which enables the sponsor to maximize IRR’s at the asset level based on separate exits. This note financing opportunity provided Thorofare an attractive loan basis and superior risk adjusted returns with strong collateral values. The sponsor plans on accessing fee-simple ownership through workouts and subsequently adding value at the properties through capital improvements and leasing prior to refinancing or selling each property individually.
About Thorofare Capital: Los Angeles-based Thorofare Capital, Inc. is a direct portfolio lender specializing in short term commercial real estate loans. Thorofare is currently deploying capital from Thorofare Asset Based Lending Fund III, L.P., its third discretionary real estate debt fund, targeting investments between $2 million to $25 million across all property types throughout the United States. With a national footprint, Thorofare has invested in excess of $265 million since 2010 in more than 70 transactions across 14 states, representing an aggregate asset value approaching $500 million.