Financial Compound – Commercial Bridge Loans – Mixed Use Acquisition Loan

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Commercial Bridge Loans – mixed use acquisition loan

An 85% of all-in-cost  $14 million mixed use acquisition bridge loan was arranged by Financial Compound for the acquisition/reposition of a 30,000sf mixed use property in Los Angeles.  The property was sold by an owner-user, who intends to vacate, along with the other anchor tenant, within a year from the purchase date.  The borrower intends to re-tenant several of the spaces and substantially renovate the property.  This acquisition required the borrower to post $1,000,000 of non-refundable deposits within three weeks of executing the purchase LOI, with a counter-offer looming from an institutional investor if our borrower didn’t execute in time.  Financial Compound, the borrower’s commercial mortgage broker, facilitated a quick loan approval with a closely held lender, including completion and review of third party reports, within the 3 week window so that our client felt comfortable posting this large non-refundable deposit, and closed the loaqn from start to finish within four weeks.

Loan terms for this commercial bridge loan included an interest rate of 6.9%, with a 2 year loan term and two 1 year extension options, interest only.  Lender fee of 1%, no exit fee, first extension free and 2nd extension 1/4% fee.  This is a non-recourse loan.

Commercial bridge loans are useful for these types of quick close acquisitions.  Especially with this property which the borrower intends to renovate, the commercial bridge loan is a good financial product for short-term borrowing.  Once the borrower executes its business plan, it should be able to refinance into a larger loan, with a favorable long-term fixed interest rate.

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