Retail

Shahin Yazdi placed the 50% of purchase debt for the acquisition of a Los Angeles area church. Unlike most religious asset finances, the purchaser is not the operator, rather an investor who leases the subject to the end user. The seven year term is fixed for five years a 4.75% and amortizes over 25 years. The loan will then float the remaining two years of the term. Proceeds were leveraged to a 1.20 debt coverage ratio on actual leased income. Challenge:The borrower’s global debt to income cash flow fell below most lender guidelines. The property is a special use asset that is leased to a church, which is not a tenant profile that most lenders will consider. Solution: Mr. Yazdi focused on borrower’s significant liquidity in addition to the leased income generated from the subject property. The Church has several locations and has strong financials. The low loan to cost with fresh cash equity convinced the capital provider of this transactions’ viability.