Inland Mortgage Capital recently closed on an $8,300,000 industrial bridge loan in Denver. The collateral consisted of four unique, but supremely well-located buildings, just south of the CBD in a strong performing submarket.
IMC was able to structure an approximate 80% loan-to-cost non-recourse bridge loan by utilizing the cash flow from the existing leases to create reserves for leasing and debt service. The existing leases expire in 2019. Because of the higher loan-to-cost offered by Inland, the Borrower was able to raise less equity which allows them to keep more of the profits after the execution of the business plan. The primary tenant had vacated the buildings several years ago, but had subleased several of them under short-term arrangements at below market rents. IMC was able to close the deal in less than 45 days, which was essential as the Seller was strictly enforcing the closing date.
The 1971 vintage buildings consisted of a cold storage building, dry storage building and two office buildings. The Borrower intends to convert the subtenants into long-term tenants at market rents, or re-tenant the buildings when the leases expire. IMC was able to structure a flexible prepayment premium, along with partial release provisions, for each of the buildings.
Inland Mortgage Capital is seeking to aggressively finance industrial projects, especially in-fill industrial value-add opportunities. The program provides financing for projects from $3 to $15 million, which is where many of the industrial opportunities exist.