River Park Estates Benefits from 100 Mile Fund
- Apr 06, 2012
North Bergen, N.J.—The developer of River Park Estates, a 10-unit town home development in North Bergen, N.J., has obtained a $3.5 million bridge loan to permit completion of the project. The loan was provided by Procida Funding LLC’s 100 Mile Fund, which focuses on providing financing for $2 million to $10 million deals within 100 miles of the Englewood Cliffs, N.J.-based headquarters of Procida Funding.
What about River Park Estates intrigued Procida Funding? “It was a solid project from the beginning,” the company’s principal Kyle Funsch tells MHN.
“The developer had the right idea. But he didn’t complete the project in time to sell it at the peak of the market. So what we did is negotiate the deal down for him, so he could finish the project in a timely fashion, and can be at a lower basis as he rents out the units. He‘s going to hold off for a period of time, probably three to five years, then fix up the property and sell the units.”
Most private equity funds target the $10 million and up market, Funsch adds. That frees Procida Funding to meet needs of smaller owners and developers, like Mario Echevarria, the developer of River Park Estates. Such developers and owners will be the engines of local real estate recovery, Funsch says.
“Procida Funding provided much more than a bridge loan,” Echevarria reports. “They provided the local expertise, which resulted in not only the right loan, but adjustments that made the project work. We met with many different lending groups, but Procida was the only company who could get the deal done.”
In addition to the required loan‘s size, and the fact that North Bergen is within 100 miles of Englewood Cliffs, another factor that appealed to Procida Funding was the potential of the North Bergen-Union City region.
“That whole area, the upper portion of New Jersey’s Gold Coast, is an excellent opportunity for multifamily development,” Funsch says.
“If you look at Union City, for instance, it’s the most populated city within Northern New Jersey. People need a place to live. If you’re providing a new property for rental, it’s going to be the first off the market. People want a new place as opposed to an old place.”
As for the rationale behind the establishment of the 100 Mile Fund, “it was pretty much founded on the sense of knowing one’s market,” Funsch says.
“The CEO of our company, Billy Procida, had a stimulus idea. What underpins that idea is the notion of lending money to developers who really know their markets, based on their understanding of their regions’ needs.”
What’s up next for Procida Funding? The company is hoping to approve $100 million in loans in 2012 within that 100-mile radius from its headquarters.
“We’ve been on target for the first quarter, and are looking to carry that forward through the rest of the year,” Funsch says.