How I Underwrote a $350M Tower in St Louis

I underwrote a $350MM tower in St Louis.

The developer wants to bring this tower back to life.

The tower's been bought out of foreclosure for $3.6MM, now converting to 631 luxury apartments backed by $175MM in tax credits.

The ask on the table is an $8MM bridge loan to fund permitting and architectural work before the $120MM construction loan closes.

To fund deals like this, I always ask 4 questions:

1) What stage of risk are we in?

- Pre-construction, entitlement and design
- Building already owned, free and clear
- Capital raise for the build just kicking off

2) What makes the location work?

- Downtown St. Louis, steps from the Arch
- High office vacancy, high residential demand
- New state legislation just added conversion credits

3) How is the downside protected?

- 1st position collateral on the building
- Bridge LTV sits around 55%
- Sponsor already has real cash in the deal

4) Can we control the exit?

- Exit is refinance into the construction loan
- Takeout lenders are already circling
- 12-month term, interest reserved upfront

The sponsor's capital raise still has to close before the full stack comes together; this bridge buys time, it doesn't remove that dependency.

Verdict:

Private credit: Strong fit
Family offices: Strong fit
Institutions: Medium fit
UHNW: Medium fit

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