BARSTOW — Commercial real estate firm Kidder Mathews, is auctioning a non-performing commercial real estate loan with a starting bid of $300,000 on April 3, 2023. The loan is secured by Alfa Apartments — 48 unit, five freestanding multi-family buildings on approximately 2.3 acres.
A non-performing commercial real estate loan is a loan that is not being repaid according to the loan agreement. When a lender sells the loan — usually at a discount, the buyer assumes the responsibility to collect on it. They may attempt to work out a payment plan with the borrower or foreclose on the property.
The loan on Alfa Apartments has a balance of $1,422,507 (plus interest and fees) at a fixed rate of 4.77%. The loan matures April 1, 2028.
According to Kidder Mathews Alfa Apartments has a 94% occupancy rate. This means that 94% of the property’s available units are being used by tenants.
The firm says the area has dynamic rent and population growth in outlying San Bernardino County.
Barstow is home to many workers employed in Victorville, San Bernardino, Ontario, and Riverside. In addition, Barstow is a crossroads for Inland Empire logistics, located near the confluence of I-15, I-40, and Highway 58. It is also home to Marine Corps Logistics Base and Fort Irwin National Training Center, the top two employers within the submarket. Area demographics include a 2-mile population of 20,000 having an average household income of $60,000. The median home value is currently $136,000.
The property, however, does have some issues. A fire in 2021 damaged several units, and one building containing 12 units 1-bed units appears to have been red-tagged with significant damage. In addition, the economic occupancy is estimated at 27% — only 27% of the units are generating rental income. This does not include units that are currently undergoing eviction or units that are currently offline due to maintenance issues.
The unit mix for the project consists of varying floor plans across 25 two-bedroom units and 23 one-bedroom units, ranging in size from 600 square feet to 700 square feet. The property site features include individual meters (electric, gas), carports, laundry room, and a pool (closed).
This non-performing commercial real estate loan opportunity provides investors with a chance to acquire a loan with a starting bid of $300,000. The property may require significant work, including repairs and renovations, to bring it back to its full potential.
While this loan may be risky, it also presents an opportunity for investors who are willing to do their due diligence and invest the time and resources to turn this property around. The Inland Empire region’s growth and proximity to major employers and transportation hubs make the Alfa Apartments a potentially valuable asset.
Kidder Matthews prohibits investors from conducting property tours or contacting any residents or employees. For more information visit https://www.ten-x.com/listing/2011-Borrego-Dr/27725923?openProfileModal=true