Dealmaker: Columbia Pacific Advisors Originates $25M Bridge Loan

Columbia Pacific Advisors LLC, Seattle, provided Blue Tide Partners, Covington, Ky., with a $25 million bridge loan for a nine-property, 435-unit value-add multifamily portfolio in Cincinnati.

Co-founded by former Cincinnati Bengals placekicker Doug Pelfrey, value-add real estate investment firm Blue Tide Partners acquires and renovates older multifamily product to create rental housing for low- to middle-income families in the greater Cincinnati/northern Kentucky market.

Some loan proceeds refinanced existing debt on the nine properties totaling 212 units that Blue Tide acquired in 2014 and 2015. The financing package also included a multi-million dollar reserve to pay for capital improvements across the entire 647-unit portfolio, said Columbia Pacific Advisors Managing Director of Real Estate Lending Billy Meyer.

Meyer called the financing “complex” because it involved underwriting a combination of performing and non-performing assets from multiple sellers. “The sponsor also needed a meaningful cap ex budget in order to stabilize the portfolio and find long-term debt,” he said.

Cincinnati is experiencing rapid economic growth resulting in a significant shortage of affordable housing units, especially for those with limited incomes, Meyer noted. A 2017 report from Xavier University and the Local Initiatives Support Corp. of Greater Cincinnati and northern Kentucky said the region suffers from a shortfall of 40,000 affordable housing units.

“Despite the very clear need in the marketplace, it is very difficult to get conventional financing to acquire and improve multifamily properties in need of significant rehab, which will help address the problem,” Blue Tide Partners Co-Founder Tom Miller said.

Miller said Blue Tide Partners plans to provide 2,500 units over the next five years to meet the demand for quality rental housing for families in transition.