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| Transaction Description: GSP’s Ameet Chagan placed a permanent loan with a private lender secured by 6.25 acres of unentitled and unimproved land in Northern California. The fixed rate loan self-amortizes over 20 years with no prepayment penalty after the fourth year. |
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Challenge: The subject property is located in a tertiary market and the borrower’s original bank land loan was sold to a private investor. The note had ballooned and despite the borrower’s strong banking relationships, no bank would facilitate a land loan without an exit strategy involving development within one year. Hard money financing would be expensive and carry an annual balloon risk, an event the Sponsor was anxious to avoid. |
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Solution: GSP identified a private lender willing to underwrite the property’s highway visibility and proximity to big box retail centers. GSP demonstrated to the borrowers’ strong credit and financial strength, allowing the lender to qualify the low risk of default. The loan was structured as a fully self-amortizing loan to avoid all balloon risk and allow sufficient time to carry out the development plan as the market recovered. |
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| Rate: 8.25% Fixed |
| Term: 20 Years |
| Amort: 20 Years |
| Prepayment: 4,4,4,4, open |
| Recourse |
| Lender Fee: 0.5% |
| Advisor: Ameet Chagan |
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