Salar Royaei placed the 78% loan-to-value bridge financing for a portfolio of 479 Class-C Apartments in Oklahoma City. The current loans on all three assets matured. The Subjects were mismanaged and underperforming, precluding perm lenders from underwriting the take-out. Additional funds were needed for rehabilitation and upgrades to remain competitive in the market. The two year non-recourse loan is priced at 525 over LIBOR and is paid monthly on an interest only basis. There was no lender origination fee or exit fee beyond the 12 month yield maintenance schedule.
Challenge: A recent short sale and pending litigation with the loan servicer prevented most institutional lenders from underwriting the Sponsor. Occupancy dropped while completing the due diligence.
Solution: GSP identified a reliable lender who was comfortable with the property condition and understood the upside potential post-rehab. Litigation exposure was qualified and quantified; the Sponsor showed amply equity to mitigate if necessary. Market strength and asset location combined with an executable business plan allowed the capital provider to underwrite future occupancy and work through the balance of Sponsor blemishes.
