Remington Capital – Joel A. Nathanson

A couple weeks ago I provided a general summary of several financing options from Remington including bridge loans.  Today I’d like to elaborate a little more on bridge loans as an integral part of your financing strategy.

The bridge loan is a form of financing that “bridges” the gap between funds needed now and when longer-term financing becomes available. It can be a key component in an owner’s long-term financing strategy, particularly for those faced with a here-and-now opportunity or other shorter-term situation such as improving or selling a property.

Real estate owners often use a bridge loan to purchase a second property before the sale of the first property closes. Then the proceeds from the sale are used to pay off the bridge loan. This illustrates the important “exit strategy” borrowers must have before an investor makes a bridge loan. In this example, the investor would need to see a signed sales agreement spelling out where, when, and how the bridge loan will be repaid.

Bridge financing almost always needs to be arranged and closed quickly. Such loans tend to be for 6 to 12 months with a possible 12-month extension. They are usually structured as simple interest only loans with no pre-payment penalty and all principal due in full at maturity. Risk to the investor is minimal since the loans are underwritten based on existing equity in the property and the exit strategy is defined.

Because of the owner’s need for timeliness, banks and other institutional lenders are not usually effective when it comes to bridge loans. That’s why the Capital Markets Group at Remington provides access to investors capable of making on-the-spot decisions. Included among them are hedge funds, private equity groups, mortgage pools and other sources of private capital.  Let’s talk!

Remington works with our selected brokers to offer a variety of senior debt financing options. We continue to grow our relationships with active lending capital sources to provide owners the ability to protect and expand their investment portfolio.  Some senior debt options that we offer include:

Fixed Rate Loans: Fixed rate loans offer borrowers an unchanging rate of interest with predictable payments for the life of the loan. Because of strong relationships with public and private sources of capital, many opportunities exist for the financing experts at Remington to negotiate with lenders on transaction terms, particularly interest rates, as well as maturity and prepayment penalties. This assures that clients of Remington receive the best possible and lowest cost financing package available.

Floating Rate Loans: Floating rate loans are typically tied to the London Interbank Offered Rate (LIBOR) – plus some point spread over the base rate. Attractive to borrowers with a two to four year financing requirement, floating rate loans are adjusted periodically, have minimum or no prepayment penalties, and cost less than fix rate loans because of the risk of rising interest rates. This type of loan has been particularly popular of late because of the historically low interest rates experienced in recent years. Remington professionals are equally adept at assisting client in securing such short-term financing or employing it as an integral part of a longer-term overall financing strategy.

Construction Loans: Commercial construction loans typically are short-term loans used to finance the cost of building new warehouses, industrial buildings, retail centers, apartment complexes or other properties destined to be sold or rented to others or operated by the owners. These loans tend to be varied, depending on the project, construction time, and borrower’s experience. They are meant to be paid off when construction is completed and a certificate of occupancy issued. Borrowers usually require another mortgage to pay off the construction loan when it comes due. Thus the overall process may entail two loan applications with their associated fees and closings – a potentially complex and time-consuming process that we can coordinate, facilitate and expedite.

Bridge Loans: Bridge loans are short-term loans for owners of commercial real estate property that help the borrower “bridge” a critical funding gap while arranging for a more permanent form of financing. Bridge loans tend to be time-sensitive and meant to be funded and paid back rather quickly. Consequently, traditional capital sources are usually not in the mix of potential lenders; they usually take too long to complete transactions. Most if not all bridge loans are made by private sources of capital such as hedge funds, private equity groups, mortgage pools, and other non-bank lenders, such as the wide range of capital sources with whom the Capital Markets Group of Remington has had long and established working relationships.

For more information, please visit www.remingtonfg.com or contact me directly. Thank you!  Joel Nathanson

The financing professionals at Remington provide each and every client with unmatched market expertise, including top-notch advisory services capable of successfully restructuring even the most complex transactions. Importantly, our professionals have unsurpassed access to a well-funded network of public and private capital sources representing a global capability that ranges across the capital stack for minimum transaction amounts of  $500,000 in the U.S. and $5 million abroad.

Available Programs at Remington

Senior Debt

• All Property Types and Corporate Purposes
• $500,000 Minimum in the US and $5,000,000 Internationally
• Acquisition, Development, Construction, Construction to Permanent, Rehabilitation, Bridge, Refinance

Mezzanine Debt

• All Property Types and Corporate Purposes
• $500,000 Minimum in the US and $5,000,000 Internationally
• Aggregate Leverage up to 85%
• Acquisition, Development, Construction, Construction to Permanent, Rehabilitation, Bridge, Refinance

Preferred Equity

• All Property Types and Corporate Purposes
• $500,000 Minimum in the US and $5,000,000 Internationally
• Acquisition, Development, Construction, Construction to Permanent, Rehabilitation, Bridge, Refinance

Equity

• All Property Types and Corporate Purposes
• $500,000 minimum in the US and $5,000,000 Internationally
• Acquisition, Development, Construction, Construction to Permanent, Rehabilitation, Bridge, Refinance

Joint Venture Financing

• All Property Types and Corporate Purposes
• $500,000 minimum in the US and $5,000,000 Internationally
• Active Investment
• Acquisition, Development, Construction, Construction to Permanent, Rehabilitation, Bridge, Refinance

Remington Arranges Specialized Financing For The Following Property Types and Business Purposes:

• Land
• Industrial
• Multifamily
• Office
• Retail
• Mixed Use
• Hospitality
• Medical Office
• Healthcare Facilities
• Senior Housing
• Student Housing
• Special Purpose
• Restaurant
• Self Storage
• Manufactured Home Parks
• Business Working Capital
• Business Investment Capital
• Entertainment & Multimedia
• Franchises
• Bridge Loans
• Business Loans without Real Estate
• Hard Money