Challenge

This 2,907 SF property with residential, retail, and office units was in escrow to be purchased by our borrower. In order to make this transaction work, Grand Pacific had to overcome:

• Property with an 81% vacancy rate. A single tenant that accounted for 11% of occupancy was in place.
• Highly leveraged acquisition with a seller carry back
• Property’s stabilized income was not sufficient to meet debt service

Solution

High vacancy rate and pre-stabilized properties are one of GP’s niches. Having familiarity with this type of deal, we confidently proceeded with this loan.

• Provided a 85% CLTV loan which included the purchase and other transactional fees
• GP’s recognition of borrower’s strength and property appeal
• Office unit with flexibility to be leased to a single tenant or more
• Despite the insufficient cash flow, no payment reserve was required

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