Salt Lake City—Kairos Investment Management Company (KIMC), a firm that is known for value-based equity and credit real estate investments, announces that it has provided an $8.14 million senior bridge loan to a private real estate firm to support the conversion of a former data center in downtown Salt Lake City, Utah into a multifamily and retail development.
The site comprises a parking lot and an approximately 350,000 square-foot vacant building. Located in the SLC central business district, the property is within walking distance to public transportation and providing convenient access to Utah’s freeway infrastructure, according to Carl Chang, Chief Executive Officer and Founder of Kairos.
“Through our Credit Strategy, we’re able to seize opportunities in the market that may be overlooked because, frankly, they’re misunderstood,” explains Chang. “As a former data center, this project does not fit the typical box that most lenders consider when underwriting and approving loans. The sponsor is a quality ownership group that is well-respected and active in the Salt Lake City area. It is a strategic adaptive reuse play that serves a significant demand in the market.”
The redevelopment plan involves retrofitting the existing building and adding a new eight-story structure at the property’s north end. Upon completion, the property will offer residential units, 10,000 square feet of ground-floor retail, and amenities that include a pool.
As one of the country’s fastest-growing cities with a population expected to grow by 2.2 million by 2060, the demand for multifamily housing in Salt Lake City is anticipated to remain robust in the coming years. This is amplified by increasing single-family home prices in the region, meaning home ownership is out of reach for many residents.
Chang continues: “Old data center sites are typically converted into industrial uses, with conversion into multifamily being quite rare. But in a high-occupancy market like Salt Lake City, adaptive reuse is one way to add more residential units. The “main-and-main” pedestrian-friendly location is also close to downtown’s nightlife districts and the City Creek indoor and outdoor mall on Main Street.”
Kairos structured financing based on the land’s current worth, as well as the project’s potential upside upon its completion, adds Jonathan Needell, President and Chief Investment Officer at Kairos.
“We’re highly flexible, and our focus is on a project’s story and business plan as opposed to specific asset types or markets,” says Needell. “As a result, we can provide funding for unusual projects like this one to private real estate firms focused on investment, development, management, and sustainability services in emerging markets across the United States. As traditional lenders continue pulling back from construction and renovation, short-term lending will continue to be an attractive option. At Kairos, we’re open to projects with merit, which might otherwise not fit the requirements of traditional lenders.”
The property is located at 205 East 200 South Salt Lake City, Utah.
About Kairos Investment Management Company
Kairos Investment Management Company (KIMC) is an employee-owned, entrepreneurial real estate investment firm and a registered investment adviser based in Irvine, California. Kairos has managed investments in real estate, nationwide and across multiple asset classes valued at over $4.2 billion, including more than 21.5 million square feet and over 24,969 multifamily units. The firm’s real estate experience crosses many disciplines and is recognized for its success in distressed value add real estate investing and affordable and workforce housing.
Additional information is available at https://kimc.com/.