Portfolio lender funding equity

TRANSACTION OF THE WEEK

$2,840,000 for Owner Operated Portion of Medical Office Condominiums in Los Angeles Area: The security for this non-conforming transaction consists of approx. 52% (20,000 s.f.) of a 38,000 s.f., 3-story, 1984 built, medical office building located adjacent to a major hospital. Said space totals 9 suites, all located on the 2^nd and 3^rd floors. The remaining 49% of the building is owned by the individual users as condominium offices. The entire building has been condo-mapped since the mid 1980’s. The submarket has extremely low vacancy -- the property is well located within the submarket. All rents are at or slightly above market, some tenants extended their leases during loan processing. Robert Stewart marketed the transaction to several CMBS lenders before working with an underwriter/originator willing to understand the structure. The fixed rate financing allowed the borrower to consolidate multiple existing notes, recapitalize the ownership entity and allow partners to achieve returns on their equity. Terms: (1) Rate: T + 2.60%; (2) Term/Amort: 10/30; (3) LTV: 70%; (4) DCR: 1.25; (5) Lender Fee: Par; (6) Non-recourse (Robert Stewart)

$4,550,000 for 40,000 s.f. of In-Line (Shadow Grocery Anchored) Space, 30 Days from Application to Closing: The highly unusual ownership of the asset consists of 10 unrelated Tenants-in-Common entities. GSP arranged acquisition financing and worked with a lender in a tight timeframe: (1) Friday: Initial phone call with lender; (2) Weekend: Commenced underwriting and diligence; (3) Tuesday: Application issued, signed, monies deposited; (4) The Next Thursday (9 days later): Loan approved, commitment issued, at terms as applied for with no significant changes; (5) International Intrigue: The lender would have been able to close and fund within 3 weeks from submission (21 days instead of 30), but the final tenants-in-common entity was vacationing in Italy and had to process his loan docs at the U.S. Embassy; (6) Rate Buy Down: The initial spread of T + 2.30% was bought down 14 bps by the borrower via a 1% upfront fee to attain a 8.30% all-in rate; (7) Funding/Closing: 30 days after application to accommodate borrower’s acquisition timetable. Property Specs: (1) San Gabriel Valley; (2) Loan Security: 40,000 s.f.; Overall Center: 107,000 s.f.; (3) 100% leased to a mixture of national, regional and community tenants (22 tenants total), Typical Size: 1,100 s.f.; (4) The center’s anchors include a 42,000 s.f. grocery store, restaurant, and auto service pads including a gas station. Terms: (1) Rate: 8.30% (T + 2.16% due to buy down); (2) LTV: 75%; (3) DCR: 1.25; (4) Term/Amort: 10/30; (5) Lender Fee: Par; (6) Non-recourse (Steve Bram, Brad Black)

$2,300,000 Acquisition/Reposition (80% Loan-to-Cost/75% Loan To Stabilized Value) For 23-Unit Apartment Complex, Long Beach (With "Borrower's Choice" Pricing Options): GSP arranged $2,300,000 in financing with a regional bank who structured the transaction as a construction loan. The Property: 23 units, 3 buildings, built from 1947 to 1956, extremely well located with dramatic ocean and bay views. The loan funded 76% of the purchase price (floor funding), plus provides for future fundings (structured as monthly construction draws) for renovation costs, interest reserve during renovation and an earn-out at stabilization. Terms: (1) Rate: (borrower has the choice of Prime + 0% or 90-day LIBOR + 2.75% throughout the loan term. Borrower has chosen Prime + 0% to start, but can convert at any time for no fee at any time during the loan depending on rate fluctuations); (2) Term/Amort: 2 years, interest only; (3) Recourse; (4) Lender Fee: 1.00%; (5) Loan-to-Cost: 80%. (Gary E. Mozer, Gerald Price)

HOT MONEY!!!

Portfolio lender funding equity transactions. This lender will provide up to 95% of the equity required using an assignment of partnership interest for security. (Four basic property types only: Apartments, retail, industrial, office). This lender will provide equity for existing and development transactions. They have the ability to provide debt and equity or just equity. Program Highlights: (1) Geographic: Nationwide; (2) Investment Size: Min. $2,000,000; (3) Structure: 10% preferred return, pari-passu, then up to 49% of the proceeds at sale or refinance to get to a targeted yield of 18-20%.