Transaction Overview
Bryan Shaffer recently closed his third Single Resident Occupancy (SRO) transaction in downtown Los Angeles. The three loans are not cross-collateralized or cross-defaulted. SRO usage presents a challenge for most lenders, due to the fact that they are not traditional housing units. Kitchens and bathrooms are shared, similar to a dormitory. SROs provide a valuable option for low income tenants who cannot find affordable multifamily units in urban markets like Center City Los Angeles. With the economic downturn, more students are also seeking SRO housing. Mr. Shaffer identified several mission-driven portfolio lenders who understand the floor-plan metrics and typical property tenancy of SROs. The diversified lending pool allowed the three transactions to vary as to operational status. They ranged from gut rehab (zero occupancy) to cash-out stabilized refinance on a 10-year fixed rate term. The three funded transactions totaled $14,000,000 over 350 aggregated units. Bryan is currently processing three additional SRO loan requests that total $10,000,000 of new financing.
