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In May 2015, Cygnus acquired a non-performing mortgage secured by a leasehold interest in an 83,221 sq. ft. office property located in Saddle Brook, NJ. The building was built in 1968 and had an unpaid loan balance of $5.84M. Cygnus purchased the asset for $1.65M (29% of UPB). Cygnus sold the asset in 2017 for $2.24M, following a two-year hold period, and achieved an IRR of 23.98% and a MOIC of 1.05x.

Cygnus originally purchased Lost Mountain as part of a Cygnus Property Fund II acquisition of a SunTrust REO portfolio in November 2012 for $1.065M. The asset, a distressed lease secured by a 36,056 sq. ft. retail and office property, was subsequently transferred into Strategic Income Fund in September of 2016. During the 4-year hold period, Cygnus increased occupancy from 12% to 82%, leading to positive cash flow. Cygnus sold the stabilized asset to a local investor for $3.087M, representing a IRR of 31.23%.

The Fund purchased a note secured by an 81,929 sqft flex/industrial/medical portfolio in Albuquerque, NM. Cygnus purchased the defaulted mortgage for ~35% discount to the unpaid principal balance (UPB) or less than $75psf on the underlying collateral. In March 2019, the Fund took the distressed note through the foreclosure process allowing us to unlock the value of the collateral fee simple. The portfolio is currently being held for income while value-add and disposition options are evaluated.