Background One of Rhenium’s long-term clients identified an attractive opportunity to acquire a non-performing loan (NPL) from a regional bank. The loan was secured by a senior mortgage lien on a distressed retail asset – a shopping center with a dark grocery anchor tenant. Our client’s acquisition plan was to purchase the defaulted loan from […]
Background
One of Rhenium’s long-term clients identified an attractive opportunity to acquire a non-performing loan (NPL) from a regional bank. The loan was secured by a senior mortgage lien on a distressed retail asset – a shopping center with a dark grocery anchor tenant. Our client’s acquisition plan was to purchase the defaulted loan from the bank all-cash at a discount to par, negotiate a deed-in-lieu of foreclosure agreement with the borrower, then take back fee simple title to the collateral.
The client’s value-add and stabilization strategy involved getting an executed LOI on the anchor space from another grocer, with whom he already had an established relationship, then allow the dark anchor tenant to terminate their lease for a fee and retenant the space with the other grocer. The client’s end-goal was to refinance the property and recover the majority of the initial cash investment, positioning for a profitable exit or to continue to hold and manage the asset in their portfolio.
Unfortunately, the bank lender, who was also the note seller, was reluctant to accept our client’s initial offer at a significant discount to par. Despite our client producing the best cash offer, the bank was fixated on the outdated MAI appraised value of the shopping center, which was significantly higher than the as-is market value, and getting paid off at par.
Our client brought us onto the assignment to secure note-on-note financing as well as potential equity. We were able to secure four note-on-note financing quotes and generate strong interest in an equity raise for our client, which allowed them to increase their acquisition pricing to the bank. In the end we were able to utilize the debt and equity terms we received to negotiate a seller carry back deal with an equity portion that helped bridge the bid-ask gap from the bank who was very well aware of the potential value-add their prior borrower failed to secure.
Client’s Needs
The investor needed:
Challenges
Our Solution
Our firm immediately worked with the investor to devise a creative financing strategy that would help bridge the gap between the investor’s offer and the bank’s expectations.
Results
Conclusion
This case demonstrates how our firm’s ability to structure creative and flexible financing solutions helped our client overcome a challenging roadblock in the loan acquisition process. By leveraging note-on-note financing from multiple sources, we enabled the investor to secure the deal on favorable terms and move forward with his strategic vision. Through our expertise in note-on-note financing and strong relationships with a variety of lenders, we were able to help the investor achieve a key acquisition.
Interactively engage distributed alignments via focused alignments. Dynamically fabricate excellent innovation for go forward technology. Intrinsicly impact empowered scenarios after cost effective outsourcing. Synergistically productivate pandemic e-business rather than state of the art e-tailers.
Interactively engage distributed alignments via focused alignments. Dynamically fabricate excellent innovation for go forward technology. Intrinsicly impact empowered scenarios after cost effective outsourcing. Synergistically productivate pandemic e-business rather than state of the art e-tailers.
Interactively engage distributed alignments via focused alignments. Dynamically fabricate excellent innovation for go forward technology. Intrinsicly impact empowered scenarios after cost effective outsourcing. Synergistically productivate pandemic e-business rather than state of the art e-tailers.
