Avatar Financial Group LLC provided a $4.75-million bridge loan secured by a fully leased warehouse and distribution building in Santa Ana. The two-year, first-lien loan was originated at approximately 60% loan-to-value.
The financing replaced two loans with one, retiring the property’s existing first mortgage along with a junior loan that had passed its maturity date. The tenant had invested substantially in its own build-out, and rent had commenced before the loan closed. After approximately 6 months of rental income, the sponsor intends to obtain long-term financing and repay Avatar’s bridge loan.
“A lease that has just commenced doesn’t underwrite the same as one with a payment history behind it,” said T.R. Hazelrigg IV, Avatar’s president and co-founder. “A bank waits for that history to exist. Our job is deciding whether it will. At a 60% basis, with the tenant’s own money already in the space, that wasn’t a hard call.”…