Regional Capital Group provides $11.635M of Preferred Equity financing for the acquisition of a 188,000 SF Office Complex in Dade County, Florida
Dade County, Florida – October 4, 2007 – Regional Capital Group, (“Regional Capital”, “RCG”, “Regional”,
www.regionalcapital.com), a Direct Commercial Real Estate Lender specializing alternatives to traditional financing sources with creative loan programs, announces the closing of a $30MM+ acquisition of a 188,000 square-foot office complex. This transaction proved to be quite troublesome and RCG was caught somewhere in the middle. The issues started when the senior lender walked away from the deal days before closing, which in turn resulted in not only a downtrodden Buyer, but a very disgruntled and distrusting seller. Regional Capital’s loan structure changed from the original recorded 2nd lien position to a mezzanine position and lastly to a preferred equity position, which was due to the lending parameters of the senior lender.
RCG stepped in, structured a new loan scenario, sourced a new senior lender, with whom Regional Capital had an existing relationship with and ultimately closed this acquisition in under 3 weeks.
One of the biggest challenges RCG’s faced during the underwriting process was determining the actual value of the subject property. Two sub-par appraisals failed to provide a clear understanding of the market value, as neither provided a logical explanation for their estimated market value. RCG researched and obtained independent market data as well as actual, current data from the Borrower in an effort to determine a conservative, but accurate collateral value. They concluded that the subject property was significantly under-valued and under-priced, therefore approving the 92.00% leveraged equity investment with greater ease.
Providing additional comfort to RCG was the managing member of the Borrowing entity, a local real estate development company, which had successfully acquired, converted and sold –off multiple commercial office/retail buildings in the south Florida area. Regional’s capacity to understand and analyze the ‘as-is’ collateral value of the asset as well as the future value of the asset contributed greatly to the approval of this transaction. RCG’s ability to provide equity financing as opposed to debt financing provided the Borrower with a substantially cheaper senior loan, which in turn yielded lower monthly principal and interest payments resulting in additional monthly cash flow available to the Borrower to move forward with the conversion process.
If it were not for RCG’s extensive contacts, reputation and ability to execute and deliver as promised; this deal would have never closed. Their ability to act and react to difficult, time sensitive and typically uncomfortable situations also allowed for not only the Borrower, but for RCG to turn a badly handled loan into a profitable business transaction.
ABOUT REGIONAL CAPITAL GROUP
RCG is a private short term real estate lender focused on creative funding solutions. The team at RCG brings extensive experience in all aspects of real estate lending, investment and development. Funding programs include every piece of the capital stack which may be structured as senior debt, mezzanine, participating loans or equity. We take pride in the ability to provide immediate feedback to a borrower and to structure a unique and timely solution to an untraditional funding request.
A direct commercial lender with over 50 years of combined experience and total funding of asset-based loans in excess of $3 billion, RCG was founded over 10 years ago by Paul P. Braungart with the fundamental philosophy of providing clients with a creative and specialized source of funds with maximum flexibility. As our portfolio grows,
RCG continues to create innovative loan structures to meet the increasing demands of our specialized clients.
RCG provides viable alternatives to requests that are outside of traditional lending parameters or require a timely closing to take advantage of an opportunistic situation.
Our experience has taught us how to recognize opportunities that other lenders and investors may have overlooked. Loan types include Land, Land Improvement & Development, Construction and Bridge funding. Acceptable property types are Residential Spot Lot or Tract, Multifamily, Urban Rehab, Mixed Use, Office, Retail, Industrial and Self Storage. Other property types are considered on a case by case basis. When we are presented complete information, loan turn around time is among the most expedient in the industry.
