Overview
Inland Mortgage Capital closed a $7.3 million non-recourse first mortgage loan secured by two industrial buildings in Southern California. The Borrower sought acquisition financing along with capital to renovate a long‑vacant building and address functional deficiencies.
Challenge
The property presented several hurdles:
- One building was occupied on a short-term lease, creating rollover risk.
- The second building was fully vacant and had been for an extended period.
- DSCR at closing was just 0.5x, reflecting minimal in-place cash flow.
- The Seller (an estate representing the original developer) had multiple title and legacy issues that required extensive resolution.
Solution
Inland Mortgage Capital recognized the strength of the experienced Sponsor and the tight industrial submarket, enabling a 75% loan-to-cost structure despite the low DSCR.
Key Loan Features
- Non-recourse loan with future funding for capex and tenant improvements
- Interest only upon disbursement, reducing carry costs
- Partial release option to allow a potential sale of one building
- Flexibility during extended due diligence, supporting the Borrower through title cleanup and legacy issue resolution
Conclusion
Tailored financing allowed the Borrower to acquire the property, complete necessary renovations, and reposition the asset for improved performance, demonstrating Inland Mortgage Capital's ability to underwrite complex, value‑add industrial opportunities.
