Overview
Inland Mortgage Capital successfully originated a $7,500,000 non‑recourse bridge loan to support the repositioning of a student housing community located in Bloomington, Indiana. The property, consisting of 108 units and 298 beds, sits just four miles southwest of Indiana University, offering convenient access to one of the Midwest’s largest campuses.
Property & Renovation Strategy
The townhouse‑style community is poised for a comprehensive renovation program designed to elevate its competitiveness in the student housing market. Planned improvements include:
- Interior upgrades: modern flooring, new countertops, and updated lighting fixtures
- Exterior enhancements: parking lot repairs, new fencing, and reconstructed entry stairways
IMC structured the loan with a future funding component, enabling the borrower to draw renovation capital as needed—without incurring interest on undisbursed funds. This structure preserved cash flow during the early stages of the business plan.
Borrower Background & Market Dynamics
The borrower acquired the asset through a foreclosure process. Prior to the acquisition, the property was under receivership, during which the Receiver successfully increased occupancy for the 2017–2018 academic year despite significant deferred maintenance. This performance demonstrated:
- Strong underlying demand for student housing in the Bloomington market
- Effective leasing execution even under distressed conditions
These indicators reinforced the viability of the borrower’s value‑add strategy.
IMC’s Investment Thesis
IMC aligned with the borrower’s vision that addressing deferred maintenance and upgrading unit interiors would:
- Support higher rental rates
- Improve tenant retention
- Generate substantial value creation upon stabilization
The financing reflected this confidence, with the loan structured at a 73% loan‑to‑cost ratio.
Outcome
By combining flexible bridge financing with a clear value‑add plan, IMC enabled the borrower to reposition a distressed student housing asset into a competitive, modernized community aligned with the expectations of Indiana University students.
