In December 2018, we increased our initial $10 million investment in this project to $10.75 million and extended the loan for up to one year, during which time our investment is expected to earn an annualized return of roughly 7%.
The initial loan, which we made in May 2017, carried an expected annual return of roughly 8.5%. This loan was made before construction commenced when completion risk factored into our return. At the time of our extension, construction was nearly complete and the project risk was substantially reduced. The borrower was planning to pay back the full balance of our loan with a lower-rate loan from another lender, so we matched the competitor’s rate in the interest of keeping our capital deployed and earning a return while we evaluate future opportunities.
