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 Transaction:$7,000,000 Purchase Loan on a Mixed Use Property located in Cleveland, Ohio. Challenge:Sponsors requested a Non-Recourse Loan which needed to close in less than 30-days with an absolute certainty of close before year end. Furthermore the retail portion of the property was 40% vacant and the occupying tenants had short term leases. The office portion of the property had a 20% vacancy factor which was the market vacancy rate for the area. The Syndicators of the property had very little skin in the game and since the property was in a redevelopment area there were $3 million in tax credits available which would refund the initial down payment money to the investors eventually leaving them with no skin in the game. Solution:FFB was able to identify a capital partner that was able to perform quickly and was comfortable enough with the underlying asset to get around the various issues that most lenders would have an issue with. Under the circumstances most commercial mortgage bankers/brokers would have used "Hard Money" to close a transaction of this nature but because of FFB's vast access to a wide range of lenders we were able to provide a much better solution.  Transaction:$700,000 Purchase and Tenant Improvement loan located in Los Angeles, "Frogtown". Challenge:Buyer was financially weak and had no previous history of ownership of commercial property. The subject property was vacant and the buyer wanted to reposition the industrial space into a creative office environment and flip the property. Solution:FFB was able to identify a lender that understood that "Frogtown" is the new hot area for redevelopment and was comfortable with the business plan of the borrower. Though the borrower had never owned commercial property he had extensive experience as a construction project manager for other companies along with advance degrees in architecture and land development. FFB modeled the loan using comparable creative office rents and sales to show a solid exit strategy.  Transaction:First Financial Bancorp provided advisory and consulting services for the purchase and repositioning of the Embassy Suites located in Phoenix, Arizona. Challenge:This Phoenix hotel submarket is overbuilt with an overabundance of rooms available which drove the subject property into foreclosure. Even at a vastly reduced purchase price it was difficult to justify a capital investment and a required property improvement plan (PIP)that would provide an adequate return on investment as a hotel. The buyer was a foreign national with no prior experience in Hotel ownership, had no Tax Returns and has never before invested in the US outside of Los Angeles. Solution:Since the property was comprised entirely of one and two bedroom units on 17 beautifully landscaped grounds with resort amenities including swimming pool, tennis courts, gym, lobby bar and full service restaurant it was determined that the property could be repositioned as a independent senior living facility or at the very least a multifamily apartment building. Through intensive due diligence FFB was able to convince a lender that the repositioning model was strong and arranged a tour with several members of the bank's loan committee to see the subject property and inspect several of the competing projects. In the end FFB arranged a bridge loan with 60% leverage structured with a 1st TD at 50% LTV and a line of credit for the additional 10%. Transaction:$13,740,000 Purchase Loan for an Unanchored Retail Center Challenge:Buyer was in a 1031 exchange and had a specific close date. Even though seller had leases executed all tenants had not started rent commencement at the time of closing. FFB was able to identify a portfolio lender that was comfortable with the executed leases and timeline in which TI's were going to be completed. FFB helped the sponsorship postpone the SNDA process until after closing and the transaction was able to close on time. Beyond providing a very low long term fixed rate the loan had no prepayment penalty. Transaction:$2,500,000 Cash Out Refinance of a Boutique Hotel in Avalon, Catalina. Challenge:The hotel was in the process of converting its ground floor commercial space into additional rooms. Borrower did not want a typical construction loan to finish the project and was requesting a cash out long term permanent loan. Due to the hospitality industry taking a huge downturn in a bad economy and the subject property historical performance trending negative it made most lenders uninterested in providing the requested capital under any terms. Solution:FFB was able to identify a capital partner that was familiar with the asset and was comfortable with the owners long range vision for the property. FFB provided analysis for proforma income based on pre-recession operations and additional income that would provided when construction was complete. Improving occupancy and ADR's in the market set also provided additional comfort to the lender. Transaction:$5,390,000 & $4,440,000 Cash Out Refinances on two Retail Properties in Bakersfield, California Challenge:Most lenders do not like the Bakersfield /Central Valley area and shy away from providing capital at reasonable rates and terms. One of the properties was a single tenant grocery store and the other was a multitenant retail which also included a grocery store. Solution:FFB was able to convince a lender that the lease structures in place, adequate store sales performance and the overall strength of the ownership sponsorship mitigated any negative perceptions of the subject properties locations. Transaction:Spec SFR Construction Loans Challenge:Developers that came out of the great recession with lower net worth and lower liquidity and credit issues such as defaults typically cannot obtain bank financing. This particular developer was willing to pay private money rates and terms since the profit margins were still attractive. Solution:FFB identified a bank in which it has strong ties to members of its loan committee. After presenting the requested loans and setting up several meetings with the decision makers and the borrower, FFB was able to get the lender comfortable. The borrower at one time was one of the largest land developers in the Inland Empire and had paid back the majority of the $345 million in loans that he owed. FFB showed the lender that the borrower had good character by not filing bankruptcy and the lender agreed with that prognosis. The borrower was ecstatic that he was able to get conventional financing. Transaction:$1,350,000 Cash-Out Refinance Challenge:Borrower was requesting a long term fixed rate mortgage. Most lenders shy away from the Lancaster/Palmdale market, limiting the lending resources available for 10-year fixed rate money. Furthermore, the subject property had a bootleg unit, code violations and a 44% turnover rate in 2012. If that wasn't enough the borrower was also involved in litigation on other properties. Solution:Working closely with a DUS lender that FFB has a long time relationship with, we were able to isolate each issue and come up with solutions that were both acceptable to the lender and the borrower. FFB provided data that the 44% turnover was an anomaly and not reflective of the market and in fact the asset was one of the nicest properties in the area. FFB also provided full documentation as to the litigation issues and showed that the net effect was not going to affect the subject property or the sponsor’s ability to cover potential losses. FFB advised the borrower to correct the code violations and in the end the borrower got a Non-Recourse loan on a 10-year fixed rate with $250,000 cash out.
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