Featured Financing - EOY JOY or NO JOY

With Thanksgiving around the corner now is the time to begin the process for deals that need to close by the end of the year (EOY).  Every December we see a barrage of financing requests for deals that must close by EOY, some of these get funded (JOY) and some don't (NO JOY). Even the ones that do close sometimes pay for that rapid execution in higher pricing, tougher terms and certainly lost sleep.  If you have a deal that needs to close by the end of the year we should start the conversation TODAY so we can target a close before the holidays start slowing down the process (and the risk of deals getting pushed out or falling through goes up).  Reach out to us at any time to discuss your transaction.

Capital Source of the Week

Major national footprint bank offers a 5.00% to 5.25% FIXED rate for 25 years, 25/25 fully amortizing.  No rate resets and no balloon payments. 5,3,1 prepayment penalty is in place for the first three years.  This is for owner occupied properties where the borrowers business will occupy at least 51% of the rentable square footage.  While this is an SBA product this is a program unique to this bank.  Nebo Capital has a strong relationship with the Southern California SBA Office which is actively sourcing new deals in the $1 Million to $5 Million loan size and can do deals nationally.

Capital Source of the Week

This new fund is run by experienced players and will do deals from $3MM and up for opportunistic income properties.  They can do deals anywhere but have a preference for west of Mississippi.  The group is focused on non-coastal areas where they believe returns are better (going in cashflow is important to them) and will not shy away from secondary/tertiary markets and C+ assets.  They have the ability to close all cash and back fill debt later.  They will go out as long as 7 years but will also do short term deals.

Capital Source of the Week

This new fund is run by experienced players and will do deals from $3MM and up for opportunistic income properties.  They can do deals anywhere but have a preference for west of Mississippi.  The group is focused on non-coastal areas where they believe returns are better (going in cashflow is important to them) and will not shy away from secondary/tertiary markets and C+ assets.  They have the ability to close all cash and back fill debt later.  They will go out as long as 7 years but will also do short term deals.

Capital Source of the Week - Apartment Mezz and Equity

A number of apartment deals have come into our shop recently that have required mezz (often structured as preferred equity) behind both agency and non-agency debt.  There are quite a few excellent players in this niche that are able to do positions as small as $1,000,000 and up to $35,000,000.  Today we spoke with a player in this niche that can do up to 10-year terms at attractive rates.  In addition this same group will do JV equity for cash-flowing apartments and is focused on higher cap rate deals, which leads them to secondary and tertiary markets nationwide.  This accommodates an underserved niche in our view.  We would love to show this group solid C+ and better quality cash-flowing apartment deals in markets that aren’t experiencing extremely tight cap rates.

Capital Source of the Week - Hospitality Lender

Nebo Capital is featuring a private lender specializing in hotels.  They like ground-up or value-add hotel deals in primary and secondary markets with major flags.  This is a great resource for good developers that took a hit during the downturn and now have solid transactions but some understandable credit issues.  They can provide higher leverage debt up to 80% LTC, non-recourse at single digit rates.  This group will move quickly for the right deal and has experience underwriting hotel transactions using EB-5 capital as an equity source.

Capital Source of the Week - Single Family Debt and Equity Source

Nebo has identified a capital provider focused on single family residential development and construction that is backed by a large hedge fund and has a strong appetite to deploy capital through both debt and equity platforms.
On the debt side they’ll provide funds for SFR construction and will lend on acquisition and development for SFR as long as they also provide the construction dollars.  They’ll also lend on land under contract to be sold to a builder if there's at least a tentative map on the dirt at the time of loan closing.  Cost of debt is 8-11% with 0.5-2pts at close.  Loan sizes of $8-40M, up to 85% Loan-to-Cost.
On the equity side they will joint venture and provide funds for option payments and entitlement costs if there is a clear and short path to entitlement.  Equity investments of $2-10M.
This capital source will look at deals nationally but has a preference for the Western US.  They can move very quickly for the right deal.  We recently presented them a debt opportunity and they provided a term sheet in one day with a targeted close nine days later.
Please feel free to reach out to us if you have a deal that you'd like to discuss.

Capital Source of the Week - High Leverage Lender

Nebo Capital is featuring a direct lender based in Southern California who will do high leverage bridge or mezz loans on a national basis.  This is a new group made up of very sophisticated and experienced finance professionals.  They’re looking for deals in the $10-50M+ range for all major asset classes.  They will provide high leverage debt for note purchases, discounted loan payoffs, recapitalizations, and other situations that require “out of the box” thinking. This group invests in senior, mezz, and preferred equity positions and is less costly than most high leverage lenders.  If you have a distressed or opportunistic refinance or purchase with strong real estate fundamentals this is a great group to think of; they understand deals quickly and can move fast when necessary.

Capital Source of the Week - Unique Recapitalization Financing

Nebo has identified a Southern California Investment Firm with a unique financing program for equity recapitalizations in the $500,000 - $5,000,000 range.

Program Parameters:

  • A recap tool for existing ownership or JV equity for new ownership structures.
  • For assets located in primary and secondary markets in California, Texas, Colorado, Arizona, Nevada, Oregon and Washington.
  • The investment capital is cash flow driven, so deals must provide for preferred return to be paid current.
  • Typical amount of investment capital per transaction is $500,000 to $5,000,000.
  • Product preference – Office, Medical Office, Industrial, Retail, Mini-Storage and Multi-Family.
  • Ownership must be strong and experienced such that it can demonstrate its ability to execute the prescribed business plan for the asset.
  • The equity investment is secured by a partnership interest reflective of its share of the total current equity in the asset.
  • Terms of each transaction will vary, but a typical structure will require an 8% to 10% preferred return to be paid current annually from cash flow during the hold period, and upon a refinance or sale, a priority return of the investor's equity, plus additional proceeds to achieve an IRR of 15% to 20% (inclusive of cash flow).

Capital Source of the Week - Fast Moving Bridge Lender

Featuring a private equity fund management firm which specializes in short-term, first mortgage financing for all commercial property types.  As of late, their niche products have been Discounted Payoff financing for loan workouts, note acquisition financing for investors that purchase non-performing loans, and REO acquisition financing.  Transaction sizes from $1 million to $25 million.  They are a direct, balance sheet lender with discretionary capital for investment. 

  • National coverage in all primary and secondary markets; they will also consider tertiary markets for transactions with strong fundamentals
  • Ability to close transactions in as little as five business days, average turnaround is 10 business days
  • Cash-flow driven underwriting and ability to provide advance funds for capital expenditures, tenant improvements, and leasing commissions

Capital Source of the Week - Lost Cost Non-Recourse Cash-Out / Refi

We recently went under application with a cash-out refinace of a 30,000 ft2 office building with a rate under 4%!  This is non-recourse for a 11-year balloon loan (it would have been 10-years but it worked out as 11 years due to a special circumstance).   Even though the majority of tenants were newly leased start-up companies, the lender aggresively pursued the deal because of its excellent location, diversified tenant mix, and turn-key spaces in a great building.

Capital Source of the Week - New Private Short Term Bridge Lender

A knowledgeable, Southern California real estate family with plenty of cash liquidity and an appetite for opportunities with a story that is quick and easy to understand has started putting money out for private real estate secured loans.  They specialize in very short term and complicated situations needing $1MM to $10MM or more.  Pricing is driven more on a whole dollar return basis and they like terms of less than a year.  They can look at multiple assets (including notes) as collateral and can use some level of non-real estate credit to get to the dollars needed.  Any major food group property west of the Rockies is preferred.

Capital Source of the Week - New Mezz and High Leverage Bridge Money in the Market

A long established team has put together a new capital platform that will go up to 80% LTC on Mezz or Senior loans at attractive pricing in top 20 national markets.  All major food groups AND hotels will be looked at.  

Of particular interest is that they can go from $5mm to $100mm in size.  This is non recourse money!!!

Capital Source of the Week

Nebo Capital has identified a lender that is providing permanent financing
for stabilized assets at terms that make sense.  For example a recently
quoted transaction was 6.5% fixed, par to Nebo for 10-year money.

This lender can provide almost any term, a fixed or floating rate
structure, even 30-year fully amortized.  The program is limited to
stabilized CRE major food groups in major markets at 65% LTV.  Loan sizes
$10,000,000 - $30,000,000.