$2,280,000 Acquisition Loan in Ukiah, California
Retail Property Acquisition Loan for a Vacancy-Heavy Center in Ukiah, California
Loan Amount: $2,280,000
Loan Term: 12 Months
LTC: Under 60%
Lien Position: 1st Deed of Trust
Rubicon Mortgage Fund, LLC provided a retail property acquisition loan to help an experienced, repeat sponsor acquire a multi-tenant retail center with significant vacancy in Ukiah, California. Conventional financing typically requires stabilized, in-place income, which a vacancy-heavy center does not show on paper. Rubicon underwrote the deal on the strength of the sponsor’s business plan and track record instead.
Deal overview
The property is a multi-tenant retail strip center of approximately 8,839 square feet on a 1.82 acre lot, with a mix of established in-place tenants alongside several vacant suites. The sponsor’s plan is to acquire the center, invest in targeted improvements to the empty spaces, and then decide between leasing them up or selling the asset once the repositioning plan takes shape. That flexibility is by design. The sponsor wants to keep every exit option open and let the market and leasing progress dictate the ultimate strategy.
An experienced, repeat sponsor
This is not a first-time investor testing out a new asset class. The sponsor is a real estate development group whose entire investment focus is retail centers like this one, and Rubicon has now completed more than ten loans with this group. That track record matters. Having financed many of this group’s deals, Rubicon’s underwriting team already understands how the sponsor operates: how they plan a retail acquisition, carry out renovations, and lease up the finished space. That familiarity comes from watching the group execute the same plan successfully, deal after deal.
Why conventional financing did not fit
Vacancy is the kind of factor that places a deal like this outside a conventional lender’s underwriting box. Traditional lenders financing retail properties generally look for stabilized, in-place income before committing capital, and a center with multiple empty suites does not present that on paper, regardless of the sponsor’s plan or track record. That is where Rubicon’s approach differs. Instead of underwriting strictly to current occupancy, Rubicon leaned on the sponsor’s experience and demonstrated ability to execute the same playbook successfully in the past.
Rubicon's solution
Rubicon Mortgage Fund, LLC, funded a retail property acquisition loan, giving the sponsor the capital needed to close on the center and begin work on the vacant suites without waiting on outside equity or a second lender. The loan was structured with the vacancy and renovation scope in mind, giving the sponsor room to execute the business plan without being over-leveraged on day one.
The business plan
Once the acquisition closes, the sponsor will invest in the vacant units to bring them up to a leasable standard, matching the quality of the tenants already in place. From there, the sponsor has the flexibility to lease the improved suites and hold the asset for cash flow, or to sell the stabilized center outright, whichever makes the most sense once the improvements are complete and market conditions are clear.
A rinse-and-repeat deal
Rubicon’s team describes this as a rinse-and-repeat deal: a transaction type the Fund and this sponsor have executed together enough times that both sides know exactly what to expect. That familiarity gives everyone clarity on the business plan from the outset and confidence in how the repositioning will be carried out.
Frequently asked questions
Can you get a loan on a retail property with high vacancy?
Yes. Conventional financing typically requires stabilized, in-place income, so a center with significant vacancy can be a poor fit for that model. Rubicon Mortgage Fund, LLC can underwrite a retail property acquisition loan based on the sponsor’s experience and business plan, even when a center has meaningful vacancy.
How does Rubicon size a retail acquisition loan?
Rubicon sizes acquisition financing against the total project, factoring in the purchase price and the scope of planned improvements, rather than relying solely on a property’s current in-place income.
Why does sponsor experience matter for retail acquisition financing?
An experienced, repeat sponsor gives a private lender confidence in the business plan even when a property’s current performance is weak. Rubicon has completed more than ten loans with this sponsor, which allows the fund to underwrite based on a demonstrated track record.
Talk to Rubicon about a retail acquisition loan
Rubicon Mortgage Fund specializes in financing the deals that fall outside a conventional lender’s underwriting box, including retail acquisitions with vacancy. If you have a repositioning opportunity in California and need a lender who understands your business plan, contact Rubicon Mortgage Fund, LLC today.
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