Borrower put a 175,000 square foot 60% leased strip center under contract. Relatively short fuse to close, and business plan that required significant flexibility from the lender.
Red Fox was able to close the deal with an $8MM loan (82% LTC) in less than 3 weeks. Red Fox spent a significant amount of time with the borrower, understanding the center and developing an exit strategy for the exposure that was a combination of asset sales and refinancing.
The first step of the business plan was the disposition of two ground leased outparcels within 60 days of closing (reducing the loan by roughly $2MM and increasing the going in yield to over 10%).Step two was putting a large vacant 59,000 square foot box under contract with a group that executes self-storage conversions (further reducing debt to under $4MM and increasing the debt yield to over 18%). Finally, the plan calls for a refinancing of the remainder of the GLA through a conduit execution.