$16M in 7 days by Capella Mortgage

On a Friday night at 5:30 p.m., a borrower called Capella Mortgage, thinking no one would answer, or at best, that a receptionist would answer, and he would have to explain the whole story to someone who didn’t understand anything about commercial loans. To his pleasant surprise, the CEO answered and after 30 seconds of explanation said “I know the piece, yes, we can do that, and send me everything”. This borrower had been fortunate enough to go into contract on the last asset in Nevada out of the Lehman Bankruptcy – 8 acres on Flamingo right off the strip. Since the borrower was a developer, he already had a complete plan in place to pay off the lender by within 6 months by subdividing. All he needed was enough money to take down the loan and pay interest reserves for 12 months.

We worked 5 days straight, had an investor for the 1st all lined up, who then told us – at 11 o’clock at night (36 hours before we were to close) that to do the deal he wanted 1/2 million more in fees, which he had not disclosed previously. We do not work with investors who change their fee structures, so we called one of our overseas investors, who was just waking up, told him the situation, and at midnight our time we had a conference call between the borrower, the new investor, and our team. The new investor also loved the deal, so we set the terms: a 1st mortgage with one investor for $13.5M and an equity raise of $2.5M for a total of $16M. We gave the borrower interest reserves on both pieces for one year, and closed it in the nick of time, 36 hours later.

Leave a Comment

Your email address will not be published. Required fields are marked *