Preferred Equity Loans
Preferred Equity / Joint Venture capabilities. RECC provides preferred equity loans under a joint venture structure. Eligible property types include Office, Industrial, Retail, Mixed Use, and Hospitality.
Typical Uses include:
- Value-added acquisitions
- Discounted payoffs
- Partnership buyout / equity recapitalization
Program Advantages
Purchase, refinance, discounted payoff, and 1031 Exchanges
- Minimum Borrower equity contribution as low as 5% of required equity
- Leverage up to 95% of purchase plus improvements/Cap Ex (up to 75% Stabilized LTV)
- Build all closing costs into the new loan
- Interest-Only during loan term
- Note rate may be structured as Current Pay plus Interest Accrual
- Loan term up to 4 years
Program Parameters
| ELIGIBLE PROPERTY TYPES | Multifamily, Office, Retail, Hospitality, Industrial, Mixed Use. No land developments. |
| COLLATERAL: | Asset only. |
| LOAN AMOUNT: | $3,000,000 minimum equity - $30,000,000 maximum. |
| MINIMUM DSCR: | 1.0x As-Is / 1.25x As-Stabilized |
| MAXIMUM LTV: | 95% of All-In Costs / 75% As-Stabilized |
| LOAN TERM: | Up to 4 years. |
| AMORTIZATION: | All loans are Interest Only. |
| SECURITY: | Pledge of partnership. |
| PREPAYMENT: | No prepayment penalty; minimum interest guaranty may apply. |
| REQUIRED IRR: | Negotiable. |
| CLOSING TIMEFRAME: | 21 to 30 days. |
| APPLICATION DEPOSIT: | Covers estimated transaction costs (including Processing Fee). |
| ORIGINATION FEE: | Typically 2-3 points. |
| LOAN FEES: | Borrower will be required to make a “Good Faith Deposit” in the amount of $40,000 upon execution of the Term Sheet. The Good Faith Deposit shall cover the cost of the Appraisal; Phase I Environmental and Property Condition Report; plus $5,000 non-refundable application fee; and $5,000 non-refundable underwriting fee. |
| REQUIRED REPORTS: | Self-Contained Narrative Appraisal, Property Condition Assessment and Phase I Environmental. |
| SPONSORSHIP: | Good overall credit with sufficient liquidity & demonstrated experience with similar projects. No mortgage lates, bankruptcies, or public records; case-by-case basis. |
| DOCS NEEDED FOR APPLICATION: |
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To take full advantage of your lending opportunities, start with one of our lending specialists.
Call us at (704) 350-5071.
