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An Ohio based developer turned to RFG in order to secure mezzanine financing to compliment its senior financing. The existing senior financing did not provide enough leverage to complete needed improvements to a medical office building, hence the need for the mezzanine round. The developer had recently purchased a building in Dayton that had substantial below market occupancy because of the prior ownership's mismanagement.
In order to move toward a quick closing, the developer to utilize a short term low leverage acquisition bridge loan. The developer required additional capital to make improvements to the property to attract tenants. The demands of the transaction required an entrepreneurial mezzanine lender that could quickly and easily understand the market and share the developer's conviction with the overall opportunity.
Most formulaic mezzanine lenders were not willing to absorb the deal's lease-up and market risks combined with the added risk of relatively high priced debt in the senior position. RFG, on the other hand, partnered with the developer to create a finely tuned sense of the market and felt comfortable with the property's projected lease-up. As a result, it was able to articulate the deal and its risks efficiently to its investor and delivered a $1.5MM mezzanine loan in approximately 10 days.
Just after closing, the developer secured a lease and required additional capital to continue with building improvements. RFG delivered another $1MM within a month after the first closing by simply adding to the principal balance of the original mezzanine loan. Based on the developer's satisfaction with Remington's execution of the mezzanine loan assignment, it awarded RFG the senior mortgage refinancing.
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