A large-scale multifamily investor with 4,000+ units acquired a 212-unit property in Philadelphia for $17.1M with a $1.3M renovation plan to bring rents to market. In-place income did not meet the coverage most lenders require, so GSM structured 80% LTV acquisition financing with a bank/credit union that underwrote the deal to its projected stabilized income, closing in two tranches in August and September 2024.
The investor, a large-scale multifamily operator with 4,000+ units across several markets, identified a 212-unit property in Philadelphia at $17.1M with significant value-add potential and a $1.3M renovation plan to reposition the asset and bring rents to market.
In-place rents did not support the 1.20x debt service coverage that agency lenders and most conventional financing sources require. Despite the investor's scale and track record, the deal needed a capital partner willing to underwrite against the post-renovation income profile rather than current cash flow, at aggressive leverage.
GSM Commercial Capital structured 80% LTV acquisition financing through a relationship bank/credit union that underwrote the deal on both the $17.1M purchase price and the $1.3M renovation plan. The underwriting followed the property's projected stabilized income rather than in-place rents, and the investor's 4,000+ unit track record supplied the operating credibility behind the leverage. The loan closed in two tranches, in August and September 2024.
The acquisition closed at 80% LTV despite below-threshold in-place coverage, the investor deployed significantly less equity and kept capital for the renovation, and the portfolio's growth continued with a clear path to stabilized returns. When in-place income does not tell the full story, the right lending channel and a credible operator can unlock leverage that conventional sources will not offer.