September 21, 2017
Prime Rate
4.25%
1.24%
2.26%
2.17%
Photo of Keenan Apartment Portfolio
Property Type
Multi-Family
Transaction Details

$63,581,000 Bridge
Debt Fund

Transaction Name
Keenan
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Transaction Details

The Keenan Apartment Portfolio is a 9-property, 1,160 unit apartment portfolio located in Nashville, Knoxville, and other surrounding communities in Tennessee and Kentucky. The Class B apartment portfolio was built by Robert Keenan between 1970 and 1985, and signifies one of the largest private family apartment portfolios in the southeast.

The Proposition

The entire Keenan Apartment Portfolio was acquired off-market at an exceptional basis of $54,500,000 (~$47,000/Unit). Despite excellent locations and strong in-place occupancies, rents at all of the properties are significantly below current market levels, and all assets are in need of capital improvements. The portfolio represents a very rare value-add opportunity with scale in a major southeast market.

Our Solution

Essex Financial Group arranged $63,581,000 million in 1st mortgage debt, which included an initial funding of $44,073,000 (81% of the purchase) and over $19 million in renovation capital (100% of the renovation capital). The non-recourse, 3-year interest-only loan came with a competitive spread over 30-day Libor, two (2) 1-year extensions, and flexible prepayment after 18 months. The loan was set up to allow the sponsors to use low interest rate debt to fund all capital improvements and execute their renovations without paying interest on reserved funds.