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Financial Compound – Commercial Real Estate Loans – Land

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Commercial Real Estate Loans – Land

Financial Compound has arranged a $23 million unentitled land refinance for a 5,000 acre land assemblage in a southern California coastal plain.  The assemblage is to be developed into a  low density exclusive community with a few thousand acres of private preserve, signature golf course, club-house, spa and equestrian facility.  The borrower is a developer of ultra exclusive, high amenity golf communities, brought in to joint venture an amazing land assemblage.  Financial Compound was able to undewrite using the current “of right” density as the fall back to get the loan proceeds needed for this phase of the project.  Our facility pays off the existing debt, returns $4 million of cash equity invested by the borrower to-date, and funds the remaining entitlement costs needed for ‘paper lot’ status.  The loan package includes a committment to fund 100% of the purchase of an additioanl parcel that will further add significant value to the project.  Commercial mortgage broker Financial Compound helped structure a requirement for the borrower to process entitlements based on 2 scenarios- the ‘of right’ entitlement scenario of forty 160 acre ranchettes, as well as the borrower’s scenario for 400 lots, thereby mitigating credit risk.  Furthermore, the site had been sold to the develeper by an oil company and the adjacent parcels had potential environmental issues with potential migration risks to the subject property.  Financial Compound was able to coordinate with local engineers to quantify the potential risks so that the lender could fund this transaction.

Land loans terms include a 12% interest rate, 5 year term, interest-only, non-recourse, no prepayment penalty.  Commercial mortgage broker Financial Compound was instrumental in helping the borrower find this capital provider, in a marketplace where un-entitled land financing is rare.  Financial Compound has closed more than 15,000 acres of un-entitled land financing with this particular capital provider.




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