I wanted to know how you guys would structure the following deal:
Class B Multifamily
Needs capital
Occupancy was 85% 5 years ago
Current Occupancy is 60% in a market like Phoenix (lots of supply, lots of land, but also decent amount of demand)
Drop of occupancy primarily due to new construction or re-positioning in the area
Needs capex to make property more attractive to renters and
Barely breaks event after current debt service
I was thinking about structuring a compounding preferred at a minimum of 12%. Also, wanted to know when people would structure a subordinate piece of debt in a non construction related deal.
Curious to hear people's thoughts.
Thanks
Need to be way more specific...prop value, required $ injection/timeframe, current LTV, etc.
Property value: $100mm Current LTV: 65% Capital injection: $32mm Investment Timeframe: ideally 36 months, max 60 months
Personally, I don't deal with mezz pieces, but I can give you the going rates. Pref. equity is a different matter. I'm not too sure, but I'm confident that plenty of people on this board do them. Hopefully someone will chime in.
Mezzanine Moderate Leverage - LTV: 65 - 80% / DSCR: 1.05 - 1.15 / L + 600 - 800 Mezzanine High Leverage 75 - 90% - L + 800 - 1400
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