ValueXpress has arranged a $2,915,000 CMBS conduit loan for the refinance of a 65-site manufactured housing community located in Henderson (Las Vegas), Nevada. Most of the homes are double-wide units and half of the sites are occupied by RVs. The property was unencumbered, and the entire loan provided unrestricted cash-out proceeds to the sponsor.
At the time of acquisition, the property was 41% occupied with below-market rents. The community was mismanaged by the previous owner, who did not have the capital resources to address numerous deferred maintenance items (clubhouse repairs, deteriorated paving and pool, lack of signage, failing private water/utility system, home repairs and more). The sponsor rehabilitated all of those items. Today the community enjoys 100% occupancy and a wait list for sites. The CMBS conduit loan provided for loan proceeds that exceeded the cost to purchase and renovate the community, returning all the sponsor’s cash equity and more!
“This loan exemplifies what CMBS is all about: unrestricted cash-out proceeds on a value-add transaction, even if there is no cash equity in the deal by the owner post-closing,” commented Dennis Suh, Senior Vice President at ValueXpress, who originated the loan. “Add a touch of personal bankruptcy and 20% of the homes in the community owned by the sponsor and you can see why CMBS was a home run here.”
“In addition, the project was funded through the “step-down” prepay program. The five-year non-recourse deal has one year of interest only and features declining prepayment (5%, 4%, 3%, 2%, 1%) with the ability to prepay 20% of the principal annually without penalty,” said Suh.
For your next retail loan, call Dennis Suh at 212-883-6487 or email him at email@example.com.