West Coast retailer needed a cash out refi on an industrial building it owned/occupied in LA to facilitate an acquisition it was making in the San Jose market (i.e. lender lined up for the acquisition property in San Jose, but sponsor needed equity to get the deal done). The retailer need to move quickly, was not strong financially…but had significant captive equity in the industrial asset.
Red Fox agreed to the cash out refinance on the LA asset and took a second on the San Jose asset as additional collateral. Borrower received certainty of execution on a complicated transaction and the equity it needed to take execute the acquisition.
Borrower acquired the San Jose property below market, and will add significant value upon stabilization (essentially build out for two large tenants for which sponsor has leases at closing). Red Fox’s exit strategy is a refinance or sale of either the primary or secondary collateral…which is readily attainable after the 12-month lockout period.