PROGRAM:
A) Short-Term Bridge: Typically 12-18 months (property is stable and needs minor capital improvements or cash flow growth);
B) Property Reposition: Typically 36 months (property is unstable and either needs moderate to heavy capital improvements or cash flow/occupancy growth).
ELIGIBLE PROPERTIES:
Multifamily, office, industrial, retail (anchored and non-anchored), hotel, manufactured housing, student housing, mini storage.
LOCATIONS:
All primary and secondary markets with positive demographic trends considered.
SPONSORSHIP:
Experienced sponsors that have a strong track record with asset type and market.
LOAN SIZE:
Primary loan size for consideration is $15 to $75 million.
PRICING:
Floating spread over 30/90-day LIBOR. Fixed spread over swaps. Pricing varies depending on loan-to-value ratio, debt service coverage, property type and quality and underwriting risk assessment.
LIBOR FLOORS
Required.
TERM:
Initial term up to 3 years, with one 12-month extension option (two 12-month extensions on an exception basis).
AMORTIZATION:
Interest only during initial term and required (25 or 30 years) during extension periods.
EXTENSION OPTIONS:
Available provided property achieves required DSCR and/or Debt Yield. For each extension year, spreads may increase and fees will apply.
SPONSOR EQUITY:
No cash outs, and no deferred equity unless fully and adequately collateralized.
TOTAL LOAN TO COST:
-Up to 80% for multifamily;
-Up to 80% for “strong credit” retail, office and industrial;
-Up to 75% for “standard credit” retail, office and industrial;
-Up to 65% for “flagged/strong operator” properties;
-Up to 60% for manufactured housing, student housing and mini storage.
The above figures are maximums. Each transaction will be considered on a case-by-case basis and may fall below these thresholds.
LOAN SIZING:
Will be sized based upon the asset’s take-out year cash flow and a minimum 1.25x DSCR (1.20x DSCR for multifamily) assuming a stressed debt constant or a minimum debt yield test.
ORIGINATION/EXIT FEES:
Origination- Not less than 1.0%.
Exit- Negotiated.
CARVE-OUTS:
Bankruptcy remote SPEs required. Carve-outs are standard “bad boy” package backed by a meaningful guarantor(s), not the borrowing entities.
OTHER STRUCTURAL:
A) Rebalancing to Guarantor (warm body or strong entity) for TI/LC, Capex and Interest Reserve accounts.
B) Performance tests (set DSCR tests at certain months) may be required to ensure business plan is being achieved. For higher levered deals (75% LTC), failure of a performance test will require a cash flow sweep and/or “balancing call” on the loan that will be recourse to the Guarantor.
HIGHER LEVERAGE DEALS:
Deals above 80% of cost may require a pledge of ownership interests as part of the overall collateral package.
GROSS/FUTURE FUNDING:
Certain deals may require a “gross funding” of all future capital improvement/tenant improvement and leasing commission funds at closing. In other cases, the lender will fund dollars for above items as necessary and as improvements take place.
Download PDF
This is a summary of general program terms, which are subject to change. This is not a commitment to lend.