Transaction Overview
Shahin Yazdi successfully sourced the acquisition debt of four retail/office properties in Carmel, California, totaling 11 commercial units measuring 22,000 square feet. None of the occupants provide credit leases. One-third of the subject was vacant at close and at a 0.70 DCR, was unable to support operations or service debt. The asset was mismanaged to such an extent that there had been no reimbursable expenses collected over the prior 5 years. Several tenants were on month-to-month leases or leases set to expire before the end of this five-year loan term. The Borrower’s past operating and rehabilitation history allowed the lender to become comfortable with the business plan, and Mr. Yazdi structured a loan that suited both client and lender. Sized to 65% of the total project cost, the loan is variable for 5 years at WSJ Prime + 0.50% with a 4.50% floor and a lifetime cap of 7.50%. The loan is interest only for the first 2 years and amortizes thereafter on a 25 year amortization schedule. There is no prepayment penalty or cash management aspect. Property improvement and releasing funds are deposited into an account that is completely controlled by our Borrower, allowing them to reposition the property without any delays due to fund control restrictions. An 18 month interest reserve was posted by the Borrower in addition to his top-end 10% repayment guarantee.
