Location: Beaumont, Texas
Type: Bridge Loan
Our client had struck an off-market deal and needed acquisition financing. Ideally, we would have suggested a prepayable loan, but the sponsor lacked financial strength and experience. Instead, we pursued a 5 year CMBS loan that would still provide the optionality to sell or refinance in a short timeframe. Since the seller was absentee, there was poor historical operating performance that presented upside to the buyer but also posed an underwriting challenge for a lender. In addition, the seller had been misguided in thinking that Hilton would be lenient on the Forever Young PIP, which was problematic due to our client's finite equity. Besides convincing the lender of Beaumont's limited oil & gas exposure, we also helped our client renegotiate his purchase price based on the actual PIP scope and re-jiggered the loan structure without additional equity required.