Shahin Yazdi placed the refinance of a regional retail center that was only 50% occupied at funding. This loan offered a partial return of equity to the Borrower and represented 80% of his total capitalization. The property was recently acquired as a bank REO that closed in an all-cash purchase. The five-year term is fixed at 3.9% and offers a five-year extension at then market rates.
Challenge: The property was 50% occupied prior to funding. The Borrower sought to recapitalize his personal balance sheet in this cash-out request on an underperforming asset and requested a longer term loan than is traditionally offered with a reposition/bridge scenario. Ownership was held as a TIC, mandating the requirement that all members participate in the loan due diligence process.
Solution: In-place income at funding supported the debt service with amortization. Market strength was proven as was the prior owners’ mis-management of the asset. The low dollars per square foot added significant comfort to our underwriter as did Borrower experience and incentivized the lender to process multiple Borrower applications for this TIC structure.
