Golden State Sees $14M in Gap Financing over Past Six Months

RealtyShares Closes 3 Deals in California, Across 3 Asset Classes, for More Than $14 Million

RealtyShares’ new gap financing program, which provides subordinated financing solutions for commercial real estate operators on projects under $20 million, has recently been an active source of capital in California. Over the past few months, RealtyShares has closed over $14 million in gap financing in the Golden State alone, with recent deals spanning office buildings, multifamily homes and retail spaces. These projects, detailed below, make up just a portion of the more than $205 million in gap financing that RealtyShares has deployed in total as of March 2018.

$9M Funded for Class A Office Building in Escondido, CA

Recently in Escondido, located within the San Diego metropolitan statistical area (MSA), RealtyShares structured a first- and second-lien bridge loan totaling $9 million for an attractive Class A office building. The cash-flowing property offered a strong tenant base, long-term leases and an excellent location in the I-15 Corridor submarket. RealtyShares provided senior debt through an institutional capital allocation and funded a separate junior loan through its platform of accredited investors. The property boasts an excellent commuter location and sight lines with panoramic views of the surrounding hills and valleys.

$3.3M Funded for Eight-Unit Multifamily in Los Angeles, CA

In Los Angeles, RealtyShares relied on its multifamily expertise to fund yet another first- and second-lien bridge loan, this time totaling over $3.3 million. The project included the acquisition and renovation of a well-maintained multifamily property featuring eight units. The asset offered a mix of studio, one-, two- and three-bedroom apartments as well as an exceptional location within Brentwood, one of Los Angeles’ most upscale neighborhoods according to CoStar. RealtyShares funded just over $2.8 million in senior debt and raised an additional $500,000 on the property through its platform of accredited investors. The project featured an experienced borrower and a trophy location in the Brentwood/Westwood/Beverly Hills submarket, which according to CoStar ranks second out of Los Angeles’ 20 submarkets for highest monthly rent and annual growth.

$1.8M Funded for Grocery-Anchored Shopping Center in Sacramento MSA

Rounding out RealtyShares’ recent gap financing projects in California was a $1.8 million preferred equity investment in Summerhills Plaza, a grocery-anchored shopping center located in Citrus Heights. RealtyShares worked with an institutional-quality sponsor ($359 million under management) to fund a $1.8 million preferred equity investment through RealtyShares’ platform of accredited investors. The sponsor saw an opportunity to acquire the shopping center, which offered a high-traffic location, notable national tenants and excellent demographics, and capitalize on minor renovations and lease-ups to potentially improve the performance of the plaza. The appeal of the property was further enhanced by its location within an area of strong population growth according to data from ESRI.

As of March 2018, RealtyShares has provided gap financing for over 175 projects with more than $205 million in capital raised. Functioning as a one-stop shop for sponsors, RealtyShares can help to identify the capital structure that best suits a project’s needs.

Interested in learning more about gap financing? Contact bizdev@realtyshares.com to discuss your next project.

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