Wednesday, May 22, 2013

Bryan Shaffer Completed Discounted Pay Off - DPO with 88% Loan to Cost

Commercial Real Estate Loan
DPO Payoff Loan arranged by Bryan Shaffer

Transaction Description:
Discounted Pay Off w/Replacement 1st Trust Deed to 88% of the New Basis Bryan Shaffer successfully structured a discounted pay off on a 38,000 square foot distressed office/flex building in the High Desert of Southern California. The project market was greatly impacted by the economic downturn. GSP also arraigned the replacement debt to 88% of the new basis. The five year loan amortizes over 30 years and carries a step-down prepayment.

Challenge: Our client purchased this asset for over twice the discounted note payoff amount in what ultimately became one of the worst commercial real estate markets in California. No recent sales comparables exist within this market. Occupancy and cash flow are currently positive, but there is substantial roll-over risk in a highly vacant commercial market.

Solution: GSP utilized a non-bank replacement lender to meet the requirements of this reposition. The new lender became comfortable with the Sponsors’ operations of the subject to date and his capacity to manage the asset in a depressed market. The restated basis and additional cash equity in addition to the substantial Borrower cash investment made to date further provided comfort to the Lender that this Sponsor will carry the asset until the market re-stabilizes.

Rate: 7.50%
Term: 5 Years
Amort: 30 Years
LTC: 88%
Prepayment: 3,2,1, open
Broker: Bryan Shaffer

Bryan Shaffer

George Smith Partners
Real Estate Investment Banking

CELL        310-270-6328
TEL          310-867-2906
FAX         310-557-1276