Vacant building in Spokane, WA
The subject loan is for the acquisition of a vacant building in the core of the downtown Spokane business district. The loan amount is $1,400,000 and the purchase price is $2,500,000 with a loan to value ratio (LTV) of 56%.
The borrowers will convert the property to a 447-unit self-storage facility that also includes 6,000 square feet of commercial space. The subject loan will be amended to include construction costs once final permits have been issued. The amended loan amount is expected to be $2,970,000, which will repay the current loan and provide construction financing. The appraised as-completed value is $5,830,000 with an LTV of 50.9%.
The 6000 square feet of commercial space has been pre-leased, and the borrowers have a loan commitment in place to repay our loan once the property has been stabilized.
Historically Broadmark has not financed many self-storage facilities, primarily because cheaper capital has been available to borrowers for this type of collateral. Self-storage facilities are simple and quick to build and generate large amounts of income. Our loans have become more competitive for this type of project as the use of leverage by other lenders has limited their ability to extend credit.