In May 2017, we invested $10 million in the construction of 11 luxury homes in Hollywood, Los Angeles. The initial loan was scheduled to mature on January 1, 2019, and carried roughly an 8.5% annual expected return.
When construction was nearing completion in December 2018, we increased our investment to $10.75 million and extended the loan for one year, during which time we were entitled to earn an annualized return of roughly 7%.
Over the course of last year, the borrower successfully sold six of the eleven homes and paid back the majority of our investment.
Based on the strong sales to date, we opted to extend the remaining $2.55 million loan for an additional six months. During this second extension period, our investment is entitled to an increased annualized return of roughly 8.55%.
