# Stabilization & Repositioning

Financing for Transitional Real Estate Assets.

We provide real estate financing for properties undergoing improvements, lease-up, repositioning, or stabilization before a potential sale or long-term refinancing.

## Capital for Properties in Transition

A property's current performance does not always reflect its longer-term investment potential. Changes in occupancy, property condition, or leasing strategy can create opportunities to enhance an asset's value and market position over time.

Real estate stabilization financing provides capital for properties that require time to improve occupancy, establish rental income, complete improvements, or execute an investment strategy before conventional financing becomes appropriate.

We structure financing around the property's current condition, proposed business plan, and anticipated stabilization timeline, allowing investors to pursue their objectives while preparing for a potential sale or long-term refinancing.

### Financing Through the Stabilization Process

A property may be considered transitional when its income, occupancy, condition, or operating strategy is not yet stabilized.

Repositioning can involve physical improvements, new leasing strategies, operational changes, or other initiatives intended to strengthen a property's market position.

Financing structures may account for anticipated lease-up periods, improvement plans, interest reserves, and an expected exit through a sale or long-term refinancing.

We evaluate the underlying asset, sponsor experience, proposed business plan, market conditions, and path to stabilization when determining an appropriate financing structure.

## Financing Across the Property Lifecycle

- **Property Improvements.** Support qualifying renovations and capital improvements intended to enhance property condition or performance.
- **Lease-Up Financing.** Provide capital while a property works toward stronger occupancy and recurring rental income.
- **Asset Repositioning.** Support properties transitioning to a different operating model or investment strategy.
- **Property Stabilization.** Bridge the period between a property's transitional condition and its anticipated stabilized performance.

## We Evaluate Potential, Not Just Current Performance

A property's current financial performance does not always reflect its long-term opportunity.

We evaluate the underlying real estate, sponsor capabilities, proposed improvements, market conditions, and strategy for stabilization.

Our goal is to develop financing structures that support a credible business plan while considering the collateral, timeline, and risks associated with each transaction.

## Understanding the Opportunity

- **Current Asset Position.** The property's condition, occupancy, operations, and existing financial performance.
- **Improvement & Leasing Strategy.** Proposed improvements, leasing assumptions, costs, and execution timeline.
- **Sponsor Experience.** The sponsor's background, financial capacity, and ability to execute the proposed business plan.
- **Path to Stabilization.** The strategy for improving performance and achieving a viable repayment, sale, or refinancing outcome.

## Financing Parameters

- **Facility Size:** Generally $3M–$50M
- **Advance Rate:** Up to 75%
- **Loan Position:** First Mortgage
- **Loan Term:** Up to 36 months
- **Applications:** Property improvements, lease-up, repositioning, and stabilization
- **Geography:** United States, South Florida focus
- **Eligibility Considerations:** Asset value, current condition, sponsor experience, stabilization plan, and proposed exit

_Terms are indicative and subject to underwriting and transaction requirements._

## Financing a Defined Stabilization Strategy

1. **Property Assessment.** We review the property's condition, valuation, existing operations, and available collateral.
2. **Business Plan Evaluation.** We assess the proposed improvements, leasing strategy, sponsor experience, and stabilization timeline.
3. **Financing Structure.** We develop financing terms based on the underlying property and approved business plan, including appropriate interest reserves or other structural features where applicable.

## Sample Transaction: $3 Million Property Stabilization Financing

### Supporting a Property's Transition to Rental Operations

**Property:** Rental Property

**Challenge.** A real estate investor sought financing to acquire an investment property intended for rental use. The transaction required financing that accommodated the property's initial transition toward stabilized rental operations.

**Solution.** We approved a $1.75 million first-mortgage bridge loan, representing approximately 68.6% of the property's appraised value. The facility included a 12-month, interest-only structure and a $105,000 interest reserve covering six months.

**Result.** The financing was structured around the acquisition and anticipated stabilization period, allowing time for the investor to pursue rental operations before transitioning to a longer-term financing solution or potential sale.

## Related Solutions

- [Bridge Lending](https://www.gobacapital.com/solutions/real-estate/bridge-lending/)
- [Acquisitions & Refinancing](https://www.gobacapital.com/solutions/real-estate/acquisitions-refinancing/)

- [Real Estate Financing](https://www.gobacapital.com/solutions/real-estate/)

## Finance Your Property's Next Stage.

Explore financing solutions aligned with your property's repositioning or stabilization strategy.

[Let's Talk Success](https://www.gobacapital.com/contact/)