Transaction Details

Loan Amount: $7,000,000
Rate: L + 750
Term: 1 Year
Amortization: Interest–Only
LTV: 70%
Prepayment: 6 Months of Yield Maintenance
Recourse: Recourse
Lender Origination Fee: 0.75%

Transaction Description

Summary: Continental Partners successfully arranged a $7,000,000 bridge loan for a Chicago-based borrower purchasing an iconic industrial property in the South Loop submarket of Chicago. The 115,000SF property is currently vacant generating zero cash flow. The Sponsor requested an interest-only loan to close inside of 14 days of the loan application in order to meet the purchase and sale agreement for this highly opportunistic acquisition. The 1-year term loan had an additional 1-year extension option and was sized to 70% of purchase price with six months of minimum yield maintenance to the Lender. This structure provided adequate time for the Sponsor to complete his entitlements, permits and the architecture design process in order to reposition the asset into a Class-A mixed-use property.

Opportunity: Continental was aware the Sponsor had nonrefundable, earnest money committed to this opportunity and needed a lender who could provide the highest certainty of closing. Most Lenders were having a difficult time getting to the higher loan proceeds requested due to the closing timeframe; coupled with the challenges of closing this transaction during the winter holidays and having most appraisers approached being out of pocket and not able to provide a MAI certified value. Continental provided a number of sales comps in the submarket to justify the purchase price and convinced the Lender to close without an appraisal. The Sponsor plans to complete the first phase of the business plan within the first 12 months of the loan term and refinance the existing bridge loan with a construction take out facility.

Result: Continental Partners sourced a balance sheet Bridge Lender with a very easy and horizontal approval process who ultimately provided a bridge loan facility that met the Borrower’s objectives. The Lender also agreed to drop their usual per annum interest rate hurdle down to something the Sponsor would accept. The Sponsor plans to completely reposition the property by performing extensive renovations to the interior and exterior of the asset turning it into one of the premier destination hubs of the South Loop. It was a pleasure working with both Lender and Sponsor on this transaction.