Oklahoma City - From Struggle to Triumph

Three years ago, we embarked on what would become the toughest project of our careers. In November that journey reached a triumphant milestone as we refinanced the deal with agency debt. This was more than a financial transaction — it was a story of perseverance, grit, and the ultimate preservation of capital.

In a time of capital calls and foreclosures in commercial real estate, we hope this story provides a beacon of hope to operators who are doing the right thing — those giving their all to protect investor capital.

The Beginning: A COVID Acquisition

In the wake of COVID, we acquired this property as a heavy value-add opportunity. The road ahead was anything but smooth. For seven months, we couldn’t secure new roofs, leaving the property vulnerable and delaying critical repositioning. Without improvements, undesirable elements lingered in the community longer than we anticipated.

After two missteps with property management companies, we took the bold step to self-manage the project. At the time, it was early in our self-management journey. Fast forward to today, we now self-manage our entire portfolio of over 1,500 units, but back then, it was a steep learning curve.

The Debt Challenge: Learning the Hard Way

We structured the deal with one half purchased in cash and the other half financed with a 4% floating-rate bridge loan — our only floating-rate debt at Sharpline. We didn’t buy a rate cap (lesson learned). Despite these challenges, we began executing our capital expenditure plan, removing the old mansards (earning the nickname #MansardSlayer) and making progress.

However, delays in construction and management issues extended the repositioning timeline. At one point, we were sitting at 65% occupancy across 128 units. To keep the project afloat, we refinanced a smaller, 24-unit townhouse portion of the property with a local bank. This freed up liquid capital and allowed us to keep pushing forward.

But then came the next blow: the fixed-rate period on the bridge loan ended, and the rate jumped to 9%. No rate cap. And just six months later, the loan was due.

Bridge to Bridge: A Desperate Solution

We needed the dreaded bridge-to-bridge loan to survive. With occupancy too low for agency debt and another $1 million in capex required, we approached 40 banks. Forty rejections later, there was one last option—LIMA One.

The terms were tough: a 10.83% rate and strict conditions. To secure the deal, every one of our guarantors believed in the project enough to personally guarantee the loan. LIMA accepted. We had one shot to execute and bring occupancy to 90% or risk total failure.

The Turnaround: Execution at Its Finest

Our in-house property management team stepped up. Over the next year, they brought occupancy to 95%, a monumental achievement. With the property stabilized, we began the process of securing agency non-recourse refinancing.

As rates climbed, nerves were high. We locked in at 5.58%, securing a favorable position amidst rising rates. There were delays in October that tested our patience, but in November, the deal closed.

The Payoff

With the refinance, we are saving $19,000 per month in debt payments. Reserves are robust, the property is fully stabilized, and investor distributions began for the first time in three years. Most importantly, we fulfilled our commitment to preserve investor capital.

Gratitude and Reflection

This success was a team effort.

  • To our Investors: Thank you for your belief and patience.

  • To Ben Weddington at CBRE: Your expertise guided us through every stage of financing.

  • To Matt and the team at LIMA One: Your trust made this comeback possible.

  • To our Fellow Guarantors and Partners: Your faith in Sharpline and this project was unwavering, even when the path was unclear.

And finally, to the Sharpline Communities team — our elite self-management company — you executed at the highest level. Your dedication and excellence are unparalleled.

A Message to Operators Facing Tough Times

To the GPs and sponsors out there: if you’re going through hell, keep going. Never give up. As Winston Churchill said, “Never, never, never give up.” This was a save. It’s a story worth telling, and it’s a testament to what belief, hard work, and resilience can achieve.

Here’s to brighter days ahead for all of us.