IS OF THE ESSENCE
Bluestone Capital is a commercial real estate investment firm
specializing in bridge and structured financing, as well as
mezzanine debt. We provide simplified and creative capital
solutions to meet your time-sensitive needs.
• Mixed Use
Loan Amount $2MM-$50MM
<< Financing continued from Page 42
Another option could be out-of-market
banks, which do not have a large number of multifamily construction loans
on their books, or none in the market
where the development is. Yes, banks
are tightening their construction-loan
allocations, but an out-of-market bank
may be willing to finance a project in a
market with good fundamentals where
they don’t already have exposure.
One way to draw interest in a hot mar-
ket is to offer something different from
others seeking financing. A project that
offers micro-units or affordable housing
in a market with a housing shortage
is one example. Another might be a
project located outside of a downtown
area, but in an area ripe for growth.
Low-liquidity or foreign owners
Challenge: A borrower that is asset-rich
and cash-poor is having difficulty obtaining refinancing because of banks’
stringent liquidity requirements. Additionally, the property has appraised for
more than the original loan and needs
funds to complete some construction.
Solution: Look to a private lender
that offers one- to five-year bridge loans
and lends on a national basis. Some
bridge lenders will offer 20 percent cash
out, and these bridge loans can help
complete repositioning that allows for
leasing and increased cash flow.
Challenge: A foreign-national client
seeks financing for projects in secondary markets involving small to midsize
value-add deals for various property
types. Many lenders are unwilling to go
to a tertiary market for a foreign-national
borrower, and an array of product types
adds to the complexity.
Solution: Arrange acquisition financing through debt funds, including
international sources, and permanent
financing through commercial mortgage-backed securities (CMBS) lenders.
International funds are seeking deals in
secondary U.S. markets and will not be
weary of foreign owners.
To make complex deals happen, don’t
be shy of aggressive timetables. Having
time limits on financing assignments
keeps all parties focused on meeting the
necessary closing dates.
Challenge: Investors and lenders are
shying away from projects because a
market is oversaturated with new construction and vacancies or concessions
Solution: When the capital pipeline
Deals involving senior housing, student
using, mixed-use properties, ware-uses and self-storage facilities, and
nufactured-home communities may
a second look from financing sources.
The financing of manufactured-home
mmunities, or what were commonly
own as mobile-home parks, is evolving
m mom-and-pop owners to more
phisticated multi-state investor owners.
ese owners needed acquisition financ-
, bridge loans and permanent loans to
quire, renovate and expand, and have
eived it from sources such as CMBS
ders, agency lenders and banks.
n n n
e bottom line: Traditional midmar-banks may be slowing the flow of
nstruction capital, but nontraditional
ders are still looking for attractive
als to diversify their holdings. If a
oject has the right fundamentals, a
vy mortgage broker should be able
ere or what type of project it is. n