Non-Recourse Acquisition & Predevelopment Land Loan; Coastal Orange County, California

Rate: 7.90% Fixed
Term: 12 Months
Amortization: Interest Only
Loan to Value: 60%
Lender Fee: 1.00%
Prepayment: Open Full Term
Guarantee: Non-Recourse

Transaction Description:

GSP arranged the $1,350,000 non-recourse first mortgage from a REIT to acquire two separate Target shadow-anchored outparcels totaling just over one acre. The Lender was comfortable with providing the acquisition financing due to the Borrower having previously entitled the land for a multi-tenant retail pad during the Borrower’s option period to purchase the land. The loan provides 12 months of bridge term while the Borrower pre-leases the project and finalizes construction drawings. Although the loan is non-recourse, the Lender did not require an appraisal or other third-party reports, nor did it require an interest or carry reserve although there is no in-place cash flow on either parcel. Sized to 60% of purchase price, the loan priced at 7.90% fixed for the 12-month loan duration.

Advisors

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