Team Hachem successfully secured $34,000,000 in non-recourse, construction take-out, permanent financing at 3.65% fixed for 10 years for a newly built three-story, mixed-use, 30-unit high-end residential over retail building in Santa Monica, CA.
Challenges:
The Sponsor’s existing construction loan was set to mature, and the Property had not yet received a Temporary Certificate of Occupancy. In addition, the borrowing entity was headquartered in a foreign country with extensive development experience abroad, but this was their first project in the US. Furthermore, only one of the three retail spaces had been leased and pre-leasing activity on the apartment units had not yet commenced.
Solutions:
Antonio focused on the superior location, high-quality residential units and strength of the sole retail tenant, Trader Joe’s, to ensure maximum interest among financing sources. Ultimately, Antonio and the team leveraged its expertise and strong relationship with an Insurance Company lender to execute a structured, non-recourse, low-rate, permanent loan – before Certificate of Occupancy issuance. This early financing also saved the Sponsor from having to secure a bridge loan. Furthermore, Antonio also negotiated a top-off to the loan based on the Property achieving certain milestones, thus enabling the Sponsor to access additional capital in the future.
