The thesis, right now
Manchester Arms is a 60-unit Capitol Hill micro-studio building held by Manchester Series 1 LLC on a Coastal Community Bank bridge loan, managed by Nordic Real Estate since June 2025. The Nordic-era plan is a distressed stabilization: re-tenant an inherited, under-screened rent roll (trade-outs cleared ~-8% as over-asks were reset to market), push modest +5% renewals, scale RUBS, and bring collections under control. Occupancy recovered from a ~78% trough to 91.7%; clean delinquency is down to $34,435. The deal is over-levered: at a normalized ~$290K NOI and prevailing cap rates, implied value (~$5.0-6.1M) is below the $6.93M senior loan, so common equity is underwater on a mark-to-market basis. A May-2026 rescue recap (a $792,287 preferred call at 18%, $500K of which paid the loan down from $7.43M) pairs with a forward recovery plan to stabilize NOI toward ~$504K, refinance the bridge into CMBS before the June 1 2027 maturity, and rebuild equity value.
What moved
Clean delinquency $34,435, down 36% WoW from $54,013 (6/12) - lowest since February. 11 of 60 residents.
3 eviction files with attorneys (Culbert 301 court 8/3; Smith 103 pending sheriff; Girken 202 awaiting date). Dumond 410 to lawyers 6/29 if unpaid.
5 vacant; strong top-of-funnel (42 inquiries / 9 tours / 5 apps) but ~80% declined as subprime (top credit 540). One 700+ applicant (Unit 205) approved pending verification.
Cash-tight; sequencing capex - 106 rewiring, basement radiator (~$4,500 first bid), 312 subfloor/mold. Mailboxes deferred. Consolidated capex summary being assembled.
Janitorial re-bid to ~$1,000/mo (weekly common-area + bathroom), down from $1,500-2,000.
Fire-alarm inspection overdue — Fire Marshal requirement was due in June
Brent Brown partner pressure — five-point status request (HELOC/BMO, property listings, ~$125k capital commitments, CMBS three-scenario analysis); COB 7/7 deadline passed
Brent's four watched accounts: Mauhan (109, $2,795) and Estill (209, $3,116) rolled into 30+ despite cashier's checks reportedly ready 6/23; Correll and Prudnick also rolled (Prudnick's agency payment 'pending' 3 weeks). 30+ bucket grew $23K -> $31.8K.
What this record contains
This page is generated from the canonical record. Dimensions marked partial/pending are honestly incomplete — not zero.
Occupancy & income
| Month | Income | NOI | Expenses | Margin |
|---|---|---|---|---|
| 2022-04 | $306 | -$2,808 | $3,114 | -918% |
| 2022-05 | $74,325 | $57,821 | $16,504 | 78% |
| 2022-06 | $53,237 | $35,402 | $17,834 | 66% |
| 2022-07 | $55,116 | $25,991 | $29,126 | 47% |
| 2022-08 | $43,808 | $7,647 | $36,161 | 17% |
| 2022-09 | $46,619 | $32,372 | $14,247 | 69% |
| 2022-10 | $50,360 | $24,941 | $25,419 | 50% |
| 2022-11 | $53,687 | -$23,741 | $77,428 | -44% |
| 2022-12 | $56,136 | $23,862 | $32,274 | 43% |
| 2024-01 | $76,715 | $56,274 | $20,441 | 73% |
| 2024-02 | $65,753 | $31,694 | $34,059 | 48% |
| 2024-03 | $56,874 | $30,450 | $26,424 | 54% |
| 2024-04 | $61,471 | -$11,531 | $73,002 | -19% |
| 2024-05 | $61,355 | $31,372 | $29,982 | 51% |
| 2024-06 | $58,467 | $18,791 | $39,676 | 32% |
| 2024-07 | $68,339 | $40,892 | $27,446 | 60% |
| 2024-08 | $62,726 | $38,492 | $24,234 | 61% |
| 2024-09 | $62,083 | $37,136 | $24,947 | 60% |
| 2024-10 | $68,308 | $5,489 | $62,819 | 8% |
| 2024-11 | $61,663 | $25,370 | $36,293 | 41% |
| 2024-12 | $64,898 | $37,628 | $27,270 | 58% |
| 2025-01 | $65,250 | $30,700 | $34,549 | 47% |
| 2025-02 | $63,246 | $27,072 | $36,174 | 43% |
| 2025-03 | $60,738 | $26,299 | $34,439 | 43% |
| 2025-04 | $55,275 | $19,364 | $35,911 | 35% |
| 2025-05 | $37,115 | $2,106 | $35,009 | 6% |
| 2025-06 | $54,482 | $43,358 | $11,124 | 80% |
| 2025-07 | $52,577 | $20,445 | $32,132 | 39% |
| 2025-08 | $53,413 | $38,804 | $14,609 | 73% |
| 2025-09 | $58,335 | $30,264 | $28,071 | 52% |
| 2025-10 | $55,024 | $37,405 | $17,619 | 68% |
| 2025-11 | $59,239 | $32,443 | $26,796 | 55% |
| 2025-12 | $59,345 | $40,896 | $18,449 | 69% |
| 2026-01 | $58,301 | $34,104 | $24,197 | 58% |
| 2026-02 | $66,861 | $33,942 | $32,919 | 51% |
| 2026-03 | $68,408 | $44,953 | $23,456 | 66% |
| 2026-04 | $61,010 | -$47,822 | $108,833 | -78% |
| 2026-05 | $63,481 | $43,916 | $19,566 | 69% |
Unit-level rent roll
Current rent-roll module not attached for this asset. Run rent_roll_parse.py on the latest month and pass the modules dir.
Operating performance · 2022-04 → 2026-05 (38mo)
| Year | Income | NOI | Margin | Opex |
|---|---|---|---|---|
| 2022 (9mo) | $433,594 | $181,487 | 42% | $252,107 |
| 2024 | $768,652 | $342,057 | 45% | $426,593 |
| 2025 | $674,039 | $349,156 | 52% | $324,882 |
| 2026 (5mo) | $318,061 | $109,093 | 34% | $208,971 |
Where the money goes
Repairs & Maintenance
Repairs & Maintenance up 48% (recent vs earlier) — 18.0% of opex, ~$69,032/yr.
Management
Management up 66% (recent vs earlier) — 12.1% of opex, ~$46,266/yr.
Marketing
Marketing up 40% (recent vs earlier) — 5.0% of opex, ~$19,248/yr.
Turnover
Turnover up 244% (recent vs earlier) — 1.0% of opex, ~$3,923/yr.
Repairs & Maintenance
Repairs & Maintenance spiked to $16,021 in 2026-05 (~3.0x typical) — confirm one-time vs recurring.
Taxes
Taxes spiked to $48,124 in 2022-11 (~415.6x typical) — confirm one-time vs recurring.
Insurance
Insurance spiked to $22,921 in 2026-04 (~6.2x typical) — confirm one-time vs recurring.
Other
Other spiked to $4,930 in 2026-04 (~3.1x typical) — confirm one-time vs recurring.
Marketing
Marketing spiked to $4,836 in 2025-04 (~2.7x typical) — confirm one-time vs recurring.
Administrative
Administrative spiked to $8,335 in 2024-06 (~8.6x typical) — confirm one-time vs recurring.
Turnover
Turnover spiked to $8,760 in 2026-04 (~24.0x typical) — confirm one-time vs recurring.
Rising = recent months vs earlier; spike = worst month ÷ typical. One-time acquisition/financing costs are stripped to NOI automatically.
Pricing power & velocity
Actual days vacant, unit by unit
| Unit | Re-leased | Prior move-out | New move-in | Days vacant | Basis | Type |
|---|---|---|---|---|---|---|
| 208 | 2026-07 | 2026-04-19 | 2026-06-10 | 52d | actual | trade-out |
| 207 | 2026-07 | 2026-05-24 | 2026-06-23 | 30d | actual | trade-out |
| 311 | 2026-06 | 2026-04-29 | 2026-05-30 | 31d | actual | trade-out |
| 102 | 2026-06 | 2026-05-02 | 2026-05-05 | 3d | actual | trade-out |
| 306 | 2026-05 | 2026-02-24 | 2026-04-27 | 62d | actual | trade-out |
| 302 | 2026-05 | 2026-02-08 | 2026-04-20 | 71d | actual | trade-out |
| 214 | 2026-04 | 2026-02-17 | 2026-03-27 | 38d | actual | trade-out |
| 505 | 2026-03 | 2025-12-19 | 2026-02-15 | 58d | actual | trade-out |
| 211 | 2026-03 | 2025-11-30 | 2026-02-21 | 83d | actual | trade-out |
| 502 | 2026-03 | 2026-01-31 | 2026-02-22 | 22d | actual | trade-out |
| 404 | 2026-03 | 2025-10-31 | 2026-02-21 | 113d | actual | trade-out |
| 303 | 2026-02 | 2025-09-30 | 2026-01-05 | 97d | actual | trade-out |
| 501 | 2026-02 | 2025-12-04 | 2026-01-12 | 39d | actual | trade-out |
| 408 | 2026-02 | 2026-01-14 | 2026-01-30 | 16d | actual | trade-out |
| 410 | 2026-01 | 2025-10-31 | 2025-12-16 | 46d | actual | trade-out |
| 504 | 2025-12 | 2025-10-01 | 2025-11-03 | 33d | actual | trade-out |
| 102 | 2025-12 | 2025-10-02 | 2025-11-03 | 32d | actual | trade-out |
| 312 | 2025-12 | 2025-10-07 | 2025-11-06 | 30d | actual | trade-out |
| 105 | 2025-12 | 2025-10-07 | 2025-11-05 | 29d | actual | trade-out |
| 104 | 2025-12 | 2025-06-01 | 2025-11-03 | 155d | actual | trade-out |
| 212 | 2025-12 | 2025-08-22 | 2025-11-03 | 73d | actual | trade-out |
| 307 | 2025-11 | 2025-06-30 | 2025-10-08 | 100d | actual | trade-out |
| 509 | 2025-11 | 2025-08-30 | 2025-10-31 | 62d | actual | trade-out |
| 301 | 2025-11 | 2025-08-31 | 2025-10-02 | 32d | actual | trade-out |
| 111 | 2025-11 | 2025-06-01 | 2025-10-08 | 129d | actual | trade-out |
| 408 | 2025-11 | 2025-06-02 | 2025-10-31 | 151d | actual | trade-out |
| 507 | 2025-11 | 2025-09-29 | 2025-10-10 | 11d | actual | trade-out |
| 108 | 2025-10 | 2025-08-31 | 2025-09-30 | 30d | actual | trade-out |
| 312 | 2025-10 | 2025-08-31 | 2025-10-01 | 31d | actual | trade-out |
Trade-outs & renewals — what repricing is capturing
| Month | Unit | Prior rent | New rent | Δ $/mo | Δ % | Type |
|---|---|---|---|---|---|---|
| 2026-07 | 508 | $1,199 | $1,199 | +$0 | 0% | renewal |
| 2026-07 | 208 | $1,150 | $1,150 | +$0 | 0% | trade-out |
| 2026-07 | 207 | $1,100 | $1,149 | +$49 | +4.5% | trade-out |
| 2026-06 | 311 | $845 | $845 | +$0 | 0% | trade-out |
| 2026-06 | 102 | $899 | $799 | -$100 | -11.1% | trade-out |
| 2026-05 | 306 | $1,090 | $1,125 | +$35 | +3.2% | trade-out |
| 2026-05 | 302 | $1,395 | $1,299 | -$96 | -6.9% | trade-out |
| 2026-04 | 214 | $1,675 | $1,699 | +$24 | +1.4% | trade-out |
| 2026-03 | 505 | $1,095 | $825 | -$270 | -24.7% | trade-out |
| 2026-03 | 211 | $895 | $850 | -$45 | -5% | trade-out |
| 2026-03 | 502 | $1,200 | $1,200 | +$0 | 0% | trade-out |
| 2026-03 | 404 | $1,595 | $1,699 | +$104 | +6.5% | trade-out |
| 2026-02 | 303 | $825 | $999 | +$174 | +21.1% | trade-out |
| 2026-02 | 501 | $1,495 | $1,050 | -$445 | -29.8% | trade-out |
| 2026-02 | 408 | $1,199 | $1,049 | -$150 | -12.5% | trade-out |
| 2026-01 | 410 | $2,190 | $899 | -$1,291 | -58.9% | trade-out |
| 2026-01 | 402 | $1,175 | $1,234 | +$59 | +5% | renewal |
| 2026-01 | 210 | $875 | $919 | +$44 | +5% | renewal |
| 2026-01 | 503 | $895 | $940 | +$45 | +5% | renewal |
| 2026-01 | 103 | $895 | $940 | +$45 | +5% | renewal |
| 2026-01 | 203 | $895 | $940 | +$45 | +5% | renewal |
| 2026-01 | 403 | $1,095 | $1,149 | +$54 | +4.9% | renewal |
| 2026-01 | 214 | $1,595 | $1,675 | +$80 | +5% | renewal |
| 2026-01 | 304 | $799 | $839 | +$40 | +5% | renewal |
| 2025-12 | 504 | $1,790 | $895 | -$895 | -50% | trade-out |
| 2025-12 | 512 | $1,100 | $1,155 | +$55 | +5% | renewal |
| 2025-12 | 106 | $1,195 | $1,255 | +$60 | +5% | renewal |
| 2025-12 | 414 | $1,695 | $1,780 | +$85 | +5% | renewal |
| 2025-12 | 102 | $799 | $899 | +$100 | +12.5% | trade-out |
| 2025-12 | 312 | $895 | $895 | +$0 | 0% | trade-out |
| 2025-12 | 105 | $1,150 | $1,050 | -$100 | -8.7% | trade-out |
| 2025-12 | 104 | $850 | $895 | +$45 | +5.3% | trade-out |
| 2025-12 | 511 | $895 | $950 | +$55 | +6.1% | renewal |
| 2025-12 | 212 | $1,650 | $825 | -$825 | -50% | trade-out |
| 2025-11 | 307 | $1,199 | $1,100 | -$99 | -8.3% | trade-out |
| 2025-11 | 509 | $1,249 | $1,199 | -$50 | -4% | trade-out |
| 2025-11 | 301 | $1,400 | $1,445 | +$45 | +3.2% | trade-out |
| 2025-11 | 111 | $1,495 | $1,050 | -$445 | -29.8% | trade-out |
| 2025-11 | 408 | $1,195 | $1,199 | +$4 | +0.3% | trade-out |
| 2025-11 | 507 | $1,370 | $1,150 | -$220 | -16.1% | trade-out |
| 2025-10 | 108 | $1,195 | $1,195 | +$0 | 0% | trade-out |
| 2025-10 | 309 | $1,295 | $1,340 | +$45 | +3.5% | renewal |
| 2025-10 | 312 | $895 | $895 | +$0 | 0% | trade-out |
Occupancy, rent & turnover across the hold
Debt-service coverage
Negative leverage
Cost of debt 6.50% vs. ~5.75% cap rate — debt costs more than the asset yields; leverage is dilutive at this basis.| Lender | Balance | Rate | Structure | Debt svc/yr | Maturity |
|---|---|---|---|---|---|
| Coastal Community Bank | $6.93M | 6.50% | IO | $450K | 2027-06-01 |
Underwritten returns & preferred
Underwritten targets from the deal model; realized returns track distributions and mark-to-market equity on the Valuation tab.
Valuation & returns engine
Cash to & from partners
| Date | Amount | Type |
|---|---|---|
| 2026-04 | $44,000 | owner contribution (tax/insurance shortfall) |
| 2026-05-25 | $792,287 | preferred rescue call (18%) |
What needs attention
| Priority | Theme | Item | Owner | Next step | $ impact | Raised |
|---|---|---|---|---|---|---|
| High | Legal | Fire-alarm inspection overdue — Fire Marshal requirement was due in June | Vendor | Authorize/schedule the Washington Alarm inspection immediately. | — | 2026-07-01 |
| High | Legal | Brent Brown partner pressure — five-point status request (HELOC/BMO, property listings, ~$125k capital commitments, CMBS three-scenario analysis); COB 7/7 deadline passed | Partner | Respond to Brent's five-point request; the CMBS sensitivity analysis is still outstanding. | — | 2026-07-03 |
| High | Delinquency | Brent's four watched accounts: Mauhan (109, $2,795) and Estill (209, $3,116) rolled into 30+ despite cashier's checks reportedly ready 6/23; Correll and Prudnick also rolled (Prudnick's agency payment 'pending' 3 weeks). 30+ bucket grew $23K -> $31.8K. | Lombard PM | Get Nordic's account-by-account plan on these four; confirm what happened to the Mauhan/Estill cashier's checks. | — | 2026-07-03 |
| High | Insurance | Insurance renewal 8/1/26 — Alliant needs 2022–2024 loss runs to remarket (needed by 7/10) | Insurer | Forward all loss runs to Alliant and review renewal quotes before the 8/1 expiry. | — | 2026-07-08 |
| High | Financing / Loan | Refinance gap — capitalized T12 implies a ~$3.5M proceeds shortfall vs. the $6.93M extended loan; more granularly ~$430k loan shortfall + ~$280k deal costs to cover. Loan extended to June 2027 with a $500k paydown ($7.43M -> $6.93M). | Partner | Berkadia (Mackinley Robinson) canvassing 100+ banks/credit unions at 1.20-1.25x DSCR; pursue stretch-senior and pref-consolidation options to avoid a capital call. Move to biweekly reporting in the fall. | $3,500,000 | 2026-07-09 |
| Medium | Expenses | Radiator repair — a $4,500 bid plus two pending quotes and a diagnosis question dropped off the weekly report entirely this week. | Lombard PM | Nordic to re-surface the radiator bid status. | $4,500 | 2026-07-03 |
| Medium | Renovation | Unit 312 — report says tenant 'has still not responded'; unclear whether mold mitigation completed and this is now floor-replacement scheduling, or the mitigation stalled. | Lombard PM | Get a clear mold/floor status on 312 from Nordic. | — | 2026-07-03 |
| Low | Reporting | Reporting hygiene: chronic late-payer report (due 6/29) and removed-tenants/collections list dropped off the weekly; renewal-tracker date-fill error (expirations reading 2027-2033). | Lombard PM | David to send the two lists on return from vacation and fix the tracker dates. | — | 2026-07-03 |
| Medium | Legal | Ryan Haase eviction-attorney bills sent to the accountant | Partner | Confirm the eviction bills are booked/paid as an entity expense. | — | 2026-07-08 |
| Medium | Leasing | Tenant screening recalibrated — automatic credit cutoff lowered 620 -> 600 (tweener band 600-650) to balance occupancy against the sub-600 Nordic legacy placements that drove 5-6 evictions. Arie and Brent personally reviewing applications. | Lombard PM | Hold the 600 floor and Arie/Brent app review through stabilization; watch bad-debt trend. | — | 2026-07-09 |
| Medium | Expenses | Property tax — 2H 2026 King County installment ~$43,854 due 10/31; Seattle assessment jumped ~$61K -> $84-90K. 1H already paid 7/10. | Me / Lombard Equities | Calendar the 10/31 payment; pursue a penalty waiver with WA treasury and a reassessment appeal next year. | $43,854 | 2026-07-09 |
| Medium | Other | Deferred maintenance / turns: electrical faults in units 106/107/108 (107 complicated by hoarding); unit 307 floor fix or lease break; Cascade boiler contractor to be engaged. Entrada PMS migration underway. | Lombard PM | Track electrical re-inspection (107/108), 307 resolution, and the boiler contractor engagement. | — | 2026-07-09 |
Hardened 30+ delinquency · as of 2026-07-02
Hardened (resident-owed, net of housing-authority subsidy and the 0–30 timing bucket) is $31,848. ▲ $6,342 (24.9%) since 2026-06-12| Unit | Resident | Hardened 30+ | Subsidy | Note |
|---|---|---|---|---|
| 301 | Culbert, Kayla A. | $9,922 | — | Court date 08/03/26 |
| 103 | Smith, Dennis J. | $9,676 | — | Pending Sherrif |
| 202 | Girken, Justin | $5,749 | — | Pending court date |
| 109 | MAUHAN, NIEL | $1,855 | — | Will serve a 14-day if not paid by 07/06/2026 |
| 302 | Prudnick, Hannah E. | $1,781 | — | Pending agency payment |
| 209 | Estill, Craig A. | $1,745 | — | Will serve a 14-day if not paid by 07/06/2026 |
| 508 | Correll, Nicole M. | $935 | — | Will serve a 14-day if not paid by 07/06/2032 |
| 402 | Turuseta, Luis M. | $225 | — | On new payment plan. Made 1st payment. 2nd payment of $800 required on the 18th to activate it. |
leverage
Debt ($6.93M) exceeds implied asset value (~$5.0-6.1M); common equity underwater; refinance/maturity (6/1/2027) is the principal solvency risk.
refinance
CMBS take-out sizes to ~$6.33M at a conservative 5.75% cap / 70% LTV - a ~$600K gap to the $6.93M payoff, likely a further pref draw.
LEGAL
Fire-alarm inspection overdue — Fire Marshal requirement was due in June — Next: Authorize/schedule the Washington Alarm inspection immediately.
LEGAL
Brent Brown partner pressure — five-point status request (HELOC/BMO, property listings, ~$125k capital commitments, CMBS three-scenario analysis); COB 7/7 deadline passed — Next: Respond to Brent's five-point request; the CMBS sensitivity analysis is still outstanding.
DELINQUENCY
Brent's four watched accounts: Mauhan (109, $2,795) and Estill (209, $3,116) rolled into 30+ despite cashier's checks reportedly ready 6/23; Correll and Prudnick also rolled (Prudnick's agency payment 'pending' 3 weeks). 30+ bucket grew $23K -> $31.8K. — Next: Get Nordic's account-by-account plan on these four; confirm what happened to the Mauhan/Estill cashier's checks.
INSURANCE
Insurance renewal 8/1/26 — Alliant needs 2022–2024 loss runs to remarket (needed by 7/10) — Next: Forward all loss runs to Alliant and review renewal quotes before the 8/1 expiry.
FINANCING / LOAN
Refinance gap — capitalized T12 implies a ~$3.5M proceeds shortfall vs. the $6.93M extended loan; more granularly ~$430k loan shortfall + ~$280k deal costs to cover. Loan extended to June 2027 with a $500k paydown ($7.43M -> $6.93M). — Next: Berkadia (Mackinley Robinson) canvassing 100+ banks/credit unions at 1.20-1.25x DSCR; pursue stretch-senior and pref-consolidation options to avoid a capital call. Move to biweekly reporting in the fall.
delinquency
Improving ($34,435, down 36% WoW) but 74% concentrated in 3 eviction files; cure tracks the court calendar.
liquidity
No distributions; a $44K capital call (Apr) and $792K pref call (May); property is cash-tight; capex being sequenced.
expense
Management fee ~9% of EGI vs 4-6% market; turn/cleaning ~$130K annualized during lease-up.
capital_systems
Aging single elevator and plumbing risers are unfunded end-of-life capital items.
data_gap
Missing: original underwriting model, loan amortization schedule/terms, third-party appraisal, PPM/waterfall terms (promote assumed).