$1,740,000 Cash-Out Refinance for Unentitled Land

Description: GSP’s Sponsor required a bridge loan for the cash-out refinance of a 12.5-acre unentitled parcel in Oceanside, California. Proceeds from the 18-month, Interest Only loan will be used for pre-development costs on a proposed 165-room Hilton flagged hotel near the Pacific Ocean.

Challenge: Lenders’ appetite for land financing is relatively low, and pinpointing a reliable Hard Money lender is difficult in today’s market. The property was free & clear at funding and despite significant cash invested, is still considered a cash-out scenario by capital providers. The appraised valuation of the land was lower than expected.

Solution: GSP identified a reliable private equity capital provider who is comfortable with the borrowers’ business plan and exit strategy. The lender ultimately funded a greater loan-to-value ratio than originally forecasted, and was able to close in a timely manner.