| Transaction Description: |
| $4,800,000 Bridge Loan for the Acquisition of a 98 Unit Senior Housing Complex in Mesa, AZ. |
Challenge: (1.) Cash flows were insufficient to service the debt. (2.) The property had been operated seasonally, without a history of year round occupancy. (3.) The Borrower wanted to maximize leverage. |
Solution: (1.) GSP demonstrated that the property was only operated seasonally and that rents were significantly below market. By obtaining a bridge loan with a one year interest reserve, the Borrower will be afforded sufficient time to stabilize the property before obtaining a permanent loan. (2.) By focusing on the stabilized value of the property rather than the cost, GSP was able to show the lender that this loan had a low LTV, even at an 85% LTC. (3.) Because the Borrower had a strong net worth, GSP brought the Borrower to a relationship bank that wanted to win this transaction in order to establish a new banking customer. Accordingly, GSP was able to generate an offer from the bank which was at significantly better terms than other lenders who were less relationship driven. |
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| Rate: LIBOR + 1.75 |
| Term: 12 mos + two 6 mo extensions |
| Amort: Interest Only |
| LTC: 85% |
| Recourse |
| Lender Fee: 0.75% |
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Key Players: Gary M. Tenzer, Bryan Berkett
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