RRA Capital facilitated an industrial-to-self-storage conversion project in Paterson, New Jersey.

The property, originally constructed in 1950, is a 4-story building with a total area of 24,000 square feet, historically utilized for industrial purposes.

To support the sponsor's conversion plans, RRA Capital provided a $3 million non-recourse, interest-only loan, complete with two extension options. This comprehensive financing package encompassed acquisition funding as well as a dedicated follow-on facility to cover the capital expenditures required for the conversion.

RRA also established an interest reserve, ensuring supplementary cash flow during the implementation of the sponsor's business plan. This well-rounded financing solution facilitated a seamless conversion process and bolstered the sponsor's growth objectives.

After an extensive ten-month negotiation process with the City of Paterson Planning & Zoning Department, the sponsor successfully obtained approval for the conversion project, resulting in the property being rezoned. With the acquisition completed, the sponsor began the conversion immediately, achieving completion within an 8-month timeframe. Throughout this period, the sponsor focused on installing self-storage units, undertaking necessary repairs and improvements, and transforming the building into a state-of-the-art, climate-controlled facility.

The converted facility offers 393 climate-controlled units, catering to customers' storage needs while providing enhanced protection for their belongings. A leasing office was also established at the front of the building, ensuring a seamless customer experience from the initial inquiry to the rental agreement.

The sponsor brought valuable expertise to the project, currently operating five stabilized self-storage properties in northern New Jersey. Their established presence in the self-storage market fortifies their ability to execute the conversion successfully and operate the facility efficiently. The conversion of the industrial building into a climate-controlled self-storage facility effectively addresses the growing demand for secure storage options in the area.

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