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SVAP III 39 Stockton, LLC

This case study highlights RRA Capital's recent closing of a multi-tenant retail center located in Escondido, California. The study focuses on the property's features, the sponsor's plans for improvements and leasing, RRA’s role in providing financing, and the successful track record between RRA and the sponsor.

Built in 1981, the property is a single-story portion of a grocery-anchored retail center spanning 37,000 square feet on a 3.4-acre site. It is part of a larger shopping center comprising five non-contiguous sites, including three out-parcels.

At the time of closing, the property was 60% leased, presenting an opportunity for the sponsor to improve the property's occupancy rate. The sponsor plans to conduct minor capital improvements and significant tenant improvements to attract additional tenants and lease up the remaining space. RRA Capital provided a non-recourse loan of $6 million, which includes acquisition funding, follow-on funding for tenant improvements, leasing costs, and capital expenditures. This secure financing structure supports the sponsor's redevelopment strategy and positions the property for increased leasing activity.

This is RRA’s second transaction with this sponsor, demonstrating a successful partnership built on trust and mutual success. Both properties were acquired from the same underperforming seller, indicating the sponsor's ability to identify value-add opportunities. The first loan with RRA Capital, acquired when the property was 44% leased, experienced significant leasing progress within five months of origination, nearly achieving full occupancy. This track record underscores the sponsor's competence and RRA Capital's support in achieving successful outcomes.

The   partnership between RRA Capital and the sponsor, evidenced by their previous collaboration, reinforces their shared commitment to achieving optimal outcomes. With a neglected property and a track record of successful value-add investments, the sponsor is well-positioned to drive the revitalization of the retail center. RRA Capital's financing support further solidifies its reputation as a reliable partner in facilitating profitable real estate transactions.

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