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Case Study: Maturity Extension and Modification – Non-CMBS

 

Situation:

  • One million square feet of industrial situated on 65 acres, comprised of office, warehouse, and distribution buildings
  • Largest tenant vacating over 200K sq. ft.
  • Maturity of note
  • 2007 origination, $13M loan
  • Hart Advisors Group was the Asset Manager

Consideration & Solution:

  • Negotiations began with lender 90 days prior to maturity
  • Hart Advisors Group completed an independent assessment of the market, reviewed projections, completed a three prong approach to valuation
  • Maturity of note
  • 2007 origination, $13M loan
  • Hart Advisors Group was the Asset Manager
  • On behalf of the Borrower, Hart Advisors Group negotiated the following:
    • A three-year extension, interest-only (previously amortizing)
    • Waiver of the extension fee ($173K)
    • Lowered the interest rate by 1% with no repayment to the lender. Floor was also lowered allowing additional interest to accrue and be paid at the future maturity
    • Borrower was required to build a TI/LC reserve of $1M through operating cash flow for the re-tenanting of the vacancy
    • Capital contribution was limited to legal fees plus $150K
    • No prepayment penalty
    • The loan extension was closed in 30 days

 

RESULTS

The overall savings to the Borrower for the extension and term was over $1MM

 

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