Commercial Mortgage Modification, $15 million loan in Southern California
Commercial Mortgage Broker Financial Compound arranged a modification/workout for an approximate o$15 million loan in a strong in-fill Southern California location. Financial Compound had originated the acquisition bridge loan and have stayed involved working through issues that have arisen since the initial closing four years ago. Based on current underwriting standards the property today is worth significantly less than the loan amount. The mixed use property has lingered below projected occupancy due to the need to readapt space that was formerly occupied by a special-use tenant. Financial Compound faciliated a five year extension to provide the borrower sufficient term to execute their business plan and create a “win-win” situation where the lender is expected to paid off in full and the borrower is able to achieve a return on their investment. Currently nobody is making money on the transaction and the borrower has agreed to steward the property back to profitability. Terms of the workout/extension include a non-recourse floating rate loan with an interest rate of 3.00% for 18 months before bumping to 4.00% for remainder of the loan term. It includes a step down prepay (with additional flexibility in the event that the property is sold as opposed to refinanced) and leasing reserves. The borrower paid down the loan $250,000 as part of the workout. There was no lender fee as a part of this workout/extension.