October 2017

Financing Multifamily Properties in Atlanta, GA

According to a survey of leading developers, lenders, and investors, conducted by Haddow & Co. and presented to the Atlanta Apartment Association, 90% of respondents said it was more difficult to obtain debt financing than a year ago, and another 67% say equity financing is more difficult to procure.

Whether multifamily investors are looking for a debt provider or an equity participant, navigating the commercial real estate finance landscape has become more complex than ever, especially for those investors without significant experience in the sector. Bloomfield Capital has funded commercial real estate projects in the greater Atlanta area since 2008, with a focus on multifamily properties. Special circumstances have become synonymous with Bloomfield’s debt and equity programs and the firm’s ability to structure financing quickly has become a strong differentiator. As demand continues to rise for multifamily inventory in Atlanta and surrounding areas, the need for a reliable financing partner rises along with it. The most recent multifamily study conducted by Colliers International shows an annual rent growth of 6.6% in Atlanta, compared with the national average of 3.8%.

Below are three previous transactions secured by multifamily properties in Atlanta that benefited from the market expertise and responsiveness of the Bloomfield deal team:

Decatur, GA Multifamily Purchase: Substantial Renovation

Bloomfield Capital provided a $2.4 million senior bridge loan on a 118- unit apartment building located in Decatur, Georgia. The funds allowed the sponsor to acquire an off-market property that had an immediate closing deadline. The senior bridge loan also provided the capital necessary to renovate the property, which allowed it to become competitive with nearby apartment complexes in terms of interior finishes and amenities.

As a direct lender, Bloomfield was able to structure, underwrite, and fund this transaction in less than 30 days. Value-add multifamily opportunities are becoming harder to find, and Bloomfield’s platform allowed the borrowers to meet a quick closing timelines.

Atlanta Multifamily Purchase: Expiring LIHTC Contract

Bloomfield Capital closed a $1.8 million senior bridge loan to purchase an apartment complex located in Atlanta, GA. The project sponsor used Bloomfield’s senior bridge loan to purchase the former Low Income Housing Tax Credit (“LIHTC”) asset from the prior lender.  Though the asset was nearly stabilized at 90% occupancy, rents lagged behind those of competitive properties and the property needed light rehabilitation and upgrades.

The sponsor was not local to Atlanta but had built a small portfolio of multifamily properties in the area.  Banks were wary of lending capital to an out of state sponsor, especially on a property with an expiring LIHTC land use restriction agreement that required local housing authority approval to property manage.

Bloomfield’s bridge capital allowed the sponsor to quickly put the property under contract, gain approval from the necessary Atlanta housing authorities to take over property management, and ultimately purchase and complete the necessary capital improvements.

Stone Mountain, GA Multifamily Purchase: 2 Week Closing

The sponsor was faced with a hard closing deadline and had no ability to extend the purchase contract after they were left at the closing table by another lender.  The seller of the asset was a local ownership group that had obtained higher offers on the property during the contract period, and they waiting for the contract to expire so that the property could be sold at a higher price.

Bloomfield’s bridge capital allowed the sponsor to quickly close the transaction and preserve $250,000 in equity that would have otherwise been at risk.  Bloomfield’s loan also provided for an interest reserve to allow all property cash flow to go towards stabilizing the property during the first six months of ownership.

Ultimately, the sponsor was able to increase occupancy on the property from 85% to 95%+ by renovating older units, improving the exterior façade of the property, and implementing a proper management strategy.

 

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September 2017

Natural Disaster Loan Assistance for Commercial Properties

The thoughts of Bloomfield Capital are with all of those affected by recent weather events across the nation. To our trusted friends, colleagues, and partners in Greater Houston and South Florida, we will hope for your continued safety while supporting the rebuilding of your communities. We encourage others to support on-the-ground relief efforts through Heart to Heart International.

Bloomfield will continue to make donations in addition to providing capital resources, including loan assistance, for rebuilding and restoring commercial assets that were impacted by recent weather events.

Catastrophic storm events have long-standing impacts on a region’s economy and its commercial real estate assets. While hurricane season is still underway, Hurricane Harvey has passed Houston, leaving an estimated $190 billion in damages according to AccuWeather.

Of this $190 billion in damages, CoStar estimates that commercial real estate damage represents $55 billion in property value citing an estimated 27% of Houston’s commercial gross leasable area to have sustained damage.

This makes Hurricane Harvey one of the costliest U.S. Hurricanes since 1980. While there has been a tremendous amount of support and relief efforts from commendable non-profits and corporations across the globe, these impacted regions will still require additional funding and capital resources to restore these major metropolises to their original state.

Bloomfield Capital has been providing disaster loan assistance through short-term bridge financing for commercial real estates since 2008. As a balance sheet lender, Bloomfield is well positioned to provide capital in disaster-stricken areas where a quick turnaround is essential. Bridge loans fill a much-needed gap for restoration expenses and refinancing for hard-hit assets in Houston, South Florida, and other afflicted areas.

As teams on the ground work to restore infrastructure, housing, and commercial real estate, the Bloomfield Capital team is available to structure unique financings for these increasingly complex situations.

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September 2017

Commercial Real Estate Finance Trends

Bloomfield Capital, a direct lender and equity investor in commercial real estate assets nationwide, curates monthly content shaping the commercial real estate finance industry in the United States.

Multifamily Executive 

A Good Time to Invest in Miami?

Industry professionals say now is a good time to increase their investments in the Miami/South Florida market, according to the latest Market Momentum survey from the National Apartment Association (NAA). Respondents ranked Miami first when asked where they’re planning to increase investments in the next six to 12 months, signaling the potential for long-term returns in the market.

Business Insider 

4 Cities Where Growth is Increasing Rental Demand and Rents

Rental growth has a lot to say about supply and demand in the rental apartment market. Over the past several years, we saw rents move up at above average levels nationwide. We are now seeing many markets losing some steam. They are catching their breath, allowing demand to catch up a bit with an impressive number of new deliveries.

SeekingAlpha.org 

Commercial Real Estate Still Strong

A quick update on the health of the commercial real estate market, which remains quite good. According to the folks at CoStar, their composite (equal weighted) price index rose a staggering 17.5% in the 12 months ended June 2017. Price gains were strongest in the lower-priced, secondary and tertiary markets. Gains in higher-priced and larger markets were a solid 5% over the same period.

GlobeSt.com 

Seniors Growth, Cost Pressures Drive MOB Demand

Demand has outpaced new additions to medical office building inventory since 2010, according to CBRE.

Urban Land Institute 

As Amazon Enters the Market, U.S. Grocers Focus on One-Stop Shopping

The first quarter of 2017 was emblematic of the transition facing traditional retailers, which are challenged on the margin by e-commerce. One segment of the retail sector, however, is going strong: grocery stores. In May, Amazon made a bet on the sector in buying Whole Foods, but an enormous amount of movement was already occurring in the field.

 

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