Goldie Apartments — Q3 2026
Dear Goldie Investors,
Goldie ended the third quarter at 85% occupancy, 29 of 34 units, down from full occupancy at the end of June. Five units were vacant on September 30, one of them already leased for October, so four were available to lease. The resident of our three-bedroom also moved out that day, and the building entered October at 82%. Rent collections were $174,000, against $199,900 in the second quarter, and the decline tracks those vacancies. Cash NOI of $148,400 reads high because neither property tax nor insurance fell in the quarter. Normalized for both, and for one month of management fees not yet paid, third-quarter NOI was about $119,000, a run-rate near $476,000 against the $516,000 we underwrote for year one.
We paid the $25,000 second-quarter distribution in July and a $35,000 third-quarter distribution on October 6, bringing total distributions to $230,000 since closing. That is below the $54,600 a quarter an 8% preferred return requires, and we sized it that way on purpose. The owner capital reserve went to the roof this summer, the second-half property-tax installment of about $38,400 was due October 31, and we want operating cash rebuilt before distributions return to the preferred level. We expect them to stay below that level until the vacant units are leased.
The roof replacement, one of the required repairs identified during acquisition diligence, was completed this year. $30,000 has been paid to the contractor and a balance of roughly $40,000 to $50,000 remains. We are finalizing the contract terms and payment schedule with the contractor, and the warranty is issued once the balance is paid. The sponsors are arranging a $40,000 loan and a second-lien line of credit on the building so the balance is not funded from operating cash.
Some things held up well. Delinquency fell from roughly $10,000 in July to $5,600 at quarter end, the two leases signed in the quarter carry face rents about $150 above the manager's market rate, and the one-bedroom leased for October came in at $1,550 with no concession. Eleven leases expire between October and December and six residents are month-to-month, so winter leasing and renewals will decide the fourth quarter. The tabs above carry the detail. Thank you for your continued partnership.
Vacancy opened up and the roof drew down the capital reserve
After a first year at full occupancy, Goldie had four units available to lease at quarter end and lost its three-bedroom resident on September 30. Collections fell $25,900 from the second quarter, the owner capital reserve went to the roof, and the third-quarter distribution was held to $35,000 while the October tax installment and the roof balance are funded.
What held up
New leases and renewals cleared above the manager's market rents. The two new leases in the quarter carry face rents of $1,800 and $1,795 on one-bedrooms marked at $1,650, and renewals landed between $2,195 and $2,600. Rent on the 29 occupied units averages $2,059 against $2,028 market for the same units. Delinquency fell by about half, and operating expenses outside tax and insurance ran about $10,900 a month.What we are managing
Five units need to lease, four of them one-bedrooms, in the slowest leasing months of the year. The roof contractor is owed $40,000 to $50,000 and the owner capital reserve is spent. The second-half property-tax installment of about $38,400 was due October 31, funded from October collections and the $15,000 moved to the tax reserve in September.Collections fell with occupancy; expenses were light because tax and insurance fall in other quarters
Third-quarter operating income was $181,100, down from $208,800 in the second quarter. Operating expenses were $32,600 because the semi-annual property tax and the annual insurance premium are paid in other quarters, so cash NOI of $148,400 overstates the run-rate. Normalized, Q3 NOI was $119,000 against $132,700 in Q2 on the same basis, a 10% decline that is almost all vacancy.
| Quarter | Income | Expense | Cash NOI | Normalized |
|---|---|---|---|---|
| Q1 (Jan–Mar) | $195,767 | $57,072 | $138,695 | — |
| Q2 (Apr–Jun) | $208,771 | $113,683 | $95,087 | $132,706 |
| Q3 (Jul–Sep) | $181,069 | $32,632 | $148,437 | $119,046 |
| Q3 annualized | $476,185 |
| Cash NOI | $148,437 |
| Less: August management fee, not paid in quarter | −$5,066 |
| Less: ¼ of annual property tax ($73,707) | −$18,427 |
| Less: ¼ of annual insurance ($23,591) | −$5,898 |
| Normalized NOI | $119,046 |
| Utilities (water, sewer, garbage, electric, gas) | $10,602 |
| Management fees (July and September) | $10,133 |
| Legal and professional | $6,020 |
| Repairs, cleaning and maintenance | $4,489 |
| Security service and bank fees | $508 |
| Advertising | $440 |
| Tenant insurance passthrough | $440 |
| Total | $32,632 |
Below NOI
Debt service on the $4,545,000 interest-only loan was $72,152 ($24,051 a month). Capital items were $3,875 of appliances and an $823 asset-management fee. That left about $71,600 after debt service and capital on a cash basis.Year-one plan
The underwritten year-one NOI was $515,700. The second-quarter run-rate sat close to it; the third quarter's $476,000 annualized pace is about 8% short, and the gap is the vacant units.¹ Normalized NOI adds back items paid on their own schedules: a full quarter of management fees, one quarter of the annual property tax, and one quarter of the June 2026 insurance premium. Q2 is restated on the same basis from current books. Directional, not a GAAP measure.
² Excludes $5,049 of "[SYSTEM] Beginning Balance" entries posted in August and September during the manager's software migration; reported operating income including them was $186,118.
Five units to lease into winter, with a heavy renewal book behind them
Occupancy went from 34 of 34 in June to 29 of 34 on September 30, with the three-bedroom resident out that day. One vacant one-bedroom was already leased for October, leaving four available. Eleven leases expire between October and December and six residents are month-to-month.
| Unit | Type | Start | Rent | Market |
|---|---|---|---|---|
| N · new | 1BR | Jul 20 | $1,795 | $1,650 |
| E · new | 1BR | Jul 30 | $1,800 | $1,650 |
| Q · renewal | 1BR | Aug 27 | $2,195 | $2,195 |
| Y · renewal | 1BR | Sep 1 | $2,363 | $2,500 |
| 8 · renewal | 1BR | Sep 1 | $2,355 | $1,950 |
| S · renewal | 2BR | Oct 1 | $2,600 | $2,399 |
Rents
Rent on the 29 occupied units averaged $2,059 at September 30, against $2,028 market for those same units. Including parking, pet and utility charges, scheduled charges averaged $2,122. The one-bedroom leased for October came in at $1,550 with no concession. Nordic is pricing the longest-vacant units first and adding listing channels, and has replaced its property manager for Goldie since the last report. Each vacant one-bedroom forgoes roughly $1,650 to $2,000 a month.Collections
Delinquent rent was $5,575 at September 30, down from roughly $10,000 in July. Two balances carry nearly all of it: $3,569 on one unit, $1,900 of which is 61 to 90 days old and is being pursued, and $1,969 of September rent on another. Residents also held $17,110 of prepaid rent.$35,000 for the third quarter, below the preferred level by design
The $25,000 second-quarter distribution was paid in July and the $35,000 third-quarter distribution on October 6, bringing total distributions to $230,000 across six payouts. The last four quarterly payouts total $175,000, a 6.4% trailing yield on $2,730,000 of common equity against the 8% preferred return, which would take $54,600 a quarter.
| Paid | Period | Amount |
|---|---|---|
| Jul 26, 2025 | Q2 2025 (stub) | $20,000 |
| Oct 27, 2025 | Q3 2025 | $35,000 |
| Jan 9, 2026 | Q4 2025 | $45,000 |
| May 1, 2026 | Q1 2026 | $70,000 |
| Jul 2026 | Q2 2026 | $25,000 |
| Oct 6, 2026 | Q3 2026 | $35,000 |
| Total | Since close | $230,000 |
| Operating account, cleared in bank | $39,704 |
| Tax reserve savings | $16,046 |
| Cleared cash | $55,750 |
| Deposits not yet cleared | $8,141 |
| Payments in transit | $12,000 |
| Cash on the books | $75,892 |
How the third-quarter figure was set
Cash at the end of September was about $75,900 on the books, $15,000 of it set aside for the second-half property-tax installment of about $38,400 due October 31. We weighed $35,000 against $40,000 and chose the lower figure to leave room for the tax payment and the roof balance without a sponsor loan. Fourth-quarter cash flow depends on how quickly the vacant units lease. At current occupancy the building covers debt service comfortably, but a distribution at the preferred level needs occupancy back near full.Winter leasing and closing out the roof decide the next two quarters
Five units need to lease in the slowest months of the year, the roof balance needs final terms and its funding in place, and the renewal book is heavier than we would like: eleven expirations through December plus six month-to-month residents.
Re-lease the vacant units
Four units were available at quarter end after one vacant one-bedroom was leased for October at $1,550 with no concession; the three-bedroom vacated September 30 adds a fifth. Nordic is pricing the longest-vacant units first and adding listing channels.
Close out the roof
$30,000 has been paid and roughly $40,000 to $50,000 remains. Contract terms and the payment schedule are being finalized, and the sponsors are arranging a $40,000 loan and a second-lien line of credit on the building so the balance is not funded from operating cash.
Property-tax appeal
Taxes rose from $35,400 for the October 2025 installment to $38,400 for April 2026. Our property-tax consultant is filing a protective appeal of the 2026 assessment, payable in 2027, based on the $6,695,000 purchase price. A reduction would be the largest single lift to NOI available.
Winter expirations and the interest-only conversion
Three leases expire in October, five in November and three in December. Renewal terms are being staggered to move expirations out of the winter window. Separately, the $4,545,000 loan is interest-only at $24,051 a month and converts to amortizing at month 37, which raises the payment in 2028.
Thin operating cash through year-end
About $55,800 of cleared cash at September 30, less the $35,000 distribution, plus October collections, had to carry the October 31 tax installment of about $38,400. The owner capital reserve is spent. If leasing lags or the roof balance comes due before the second-lien line closes, the sponsors may lend to the property or distributions may pause for a quarter.
Contractor balance outstanding
Until the balance is paid, the contractor's warranty is not issued and its lien rights remain open. Paying it from the loan and credit line rather than operating cash is the plan.
Occupancy and the winter leasing window
Seattle winter leasing is slow, and in-place rents sit slightly above market, so some vacant units may lease below the rents of the residents who left. We would rather fill units at market than hold them vacant through February.