Harborview Apartments

Fourteen assets under management, nine in the East Bay; KYC and adverse-media screens clear across three sources; two prior facilities with Lumen performed to maturity. The concern is verification, not track record: the guarantor’s personal financial statement is dated September 2025 — stale for a closing package. Guarantor liquidity information is incomplete (or does not exist in current records); approval is conditioned on a refresh dated within 90 days.

Oakland Class-B rents turned positive at +2.1% YoY after eight flat quarters. The comp set averages $2.41/SF against the subject’s in-place $2.28 — a 5.7% mark-to-market the plan doesn’t depend on capturing quickly. Submarket pipeline is 240 units (1.9% of stock), nothing delivering inside 18 months. Lease-up comps still show ~3 weeks of concessions.

The 2025 county assessment carries the property at $48.2M; sale triggers the Prop-13 step-up and taxes are correctly re-underwritten at 1.18% of price — millage verified against the county schedule. No deferred-capex flags on the 2003 build. Handed to the model: insurance renewed +18% YoY, second consecutive double-digit increase — the reserve should be forward, not trailing.

Base NOI of $2.86M ties to the T12 net of a normalized $410/unit insurance reserve. Coverage runs 1.31× base / 1.12× stressed at the selected curve; exit cap 5.75%, committee-adjusted. After the skeptic’s challenge, year-one rent growth was cut from the sponsor’s 3.5% to 3.0% (2.5% thereafter) — DSCR restated 1.34× → 1.31×, inside policy. The rate cap is still priced indicatively; its final economics must be in the workbook before approval is effective.

Leverage (65% vs ≤70% policy) and base coverage (1.31× vs ≥1.25×) clear. The exception is stress: 1.12× against 1.15× tolerance. Not a decline at this quality — but the structure must absorb it: purchased rate cap, quarterly DSCR covenant at 1.20×, cash sweep on breach. Debt yield 8.6% is acceptable for the basis.

Three challenges, two resolved before adjournment. What remains is valuation: the cap-rate evidence is a draft appraisal, and a 29% assessed-value buffer is comfort, not evidence. Abstains rather than dissents — the objections to operating assumptions were met by revision.