|
| | Fixed
Rate Earn-Outs
[ Smart Loan ] [ Conduit Program ] [ Express Program ] [ BSC Small Loan Program ] [ Credit Tenant Lease ] [ Single Tenant, Non-Credit ] [ Fixed-Rate Earn Out ] [ Bridge Loans ] [ Church Loans ]
There are certain instances where a property is not yet
stabilized, yet will be within a short period of time. Typically, owners
of these properties were forced to seek either bridge or hard money financing
until their properties reached a level of stabilization and they could qualify
for a permanent loan. This was both expensive (since there were two
closings) and risky (since there was no guarantee that a lender would be there
to take out the short term loan). This unique program takes the risk
out of the transaction.
For those properties where there is a clear path to
stabilization within 6 months, the Fixed Rate Earn-Out program is perfect.
For a small premium in the rate an owner would have gotten had the property
already been stabilized, Bond Street Capital will provide a short term loan, and
also provide the permanent financing when the property stabilizes.
Here are the basics of the program:
|
Loan Amounts: |
$3,000,000 -
$50,000,000 |
|
Qualifications: |
Existing, income-producing
properties with less than six months to stabilization.
|
|
Property Types: |
Multi-Family
Office
Retail
Industrial
Self Storage
No hotels,
healthcare or assisted living properties.
|
|
Term: |
Up to 10 ½
years (6 months being for the Earn-Out period).
|
|
Index: |
10-year U.S. Treasury.
|
|
Spread: |
Market spread
plus earn-out premium.
Upon re-sizing,
the Earn-Out amount will be priced at market rates. The new and final
interest rate will be a blend of the two interest rates weighted by loan
amount.
|
|
Initial Interest Rate: |
Based on market
10-year U.S. Treasury plus market spread plus add-on for Earn-Out. |
|
Final Interest Rate: |
Upon re-sizing
(end of Earn-Out period), the Earn-Out will be priced at market spreads.
The final interest rate will be a blend of the two interest rates weighted
by loan amount.
If loan does
not qualify for Earn-Out, interest rate will stay the same.
|
|
Earn-Out Period: |
Six-month
maximum; otherwise the deal is a candidate for the Bridge Program. |
|
Minimum Earn Out Size: |
In order to
qualify for Earn-Out, loan must resize at least $200,000 greater than
initial loan amount. |
|
Amortization: |
Interest only
during Earn-Out period; Normal amortization thereafter. |
|
Loan-to-Value: |
Multi-family
Office
Anchored Retail
Unanchored Retail
Industrial
Self Storage |
up to 80%
up to 75%
up to 80%
up to 75%
up to 75%
up to 70% |
|
Minimum DSCR: |
Multi-family
Office
Anchored Retail
Unanchored Retail
Industrial
Self Storage |
1.20x
1.25x
1.25x
1.30x
1.25x
1.30x |
|
Typical Closing: |
45 – 60 days
from receipt of executed application and Good Faith Deposit. |
|
Required Reports:
|
MAI Appraisal
Phase I
Environmental Assessment Report Physical Condition Assessment Report
Agreed Upon
Procedures (AUP).
All reports to
be ordered by BSC and prepared by approved vendors only.
|
|
Recourse: |
Non-recourse
except for standard carve-outs for "bad boy" acts and
environmental. |
|
Prepayment: |
Defeasance.
Open to prepayment during last 60-days of loan term.
|
|
Required Escrows: |
Real estate
taxes, insurance, replacement reserves, capital improvement reserves
& tenant improvements and leasing commissions (when applicable).
|
|
Suite 402