LTV on commercial deal - Posted by Brice

Posted by Brice on November 30, 1999 at 09:09:19:

Forgot to mention that the property is located in Pa, suburban Philadelphia.

LTV on commercial deal - Posted by Brice

Posted by Brice on November 30, 1999 at 06:39:34:

I’m looking for a lender who has enough foresight to analyze a commercial deal. My bank is willing to loan on the appraisal - BUT the piece I’m buying has sub-par leases (with 30-day termination clauses) and the bank wants to loan based on as-is discounted CF.

Background: 14,500 s.f. medical office bldg on 2 acres adjacent to hospital. Contract $1.5. Sold comps are $140 sf + additional land at around $5. sf. Two sub-par leases (1) at $12 s.f, 1 at $17 sf (should be 23.00 NNN) Additional acre is parking leased to hospital at $75k/yr. Hospital built addition based on additional parking provided by lease - lease is cancellable with 30 days notice… if cancelled - hospital is in violation of code…They literally have no other options here.

Ground is zoned for and will support additional 9,000 ft office plus 3,000 sf bank pad. Discussions with bank are at $41 sf. NNN. Comps on medical space (new) are at $24 sf. nnn. with no tenant finish.

Based on discounted CF, my valuation (net of development rights) is $2.1.

Problem: My valuation assumes that the vacant space will be rented at market rates within 6 mo (conservative as I already have strong interest in the balance of the space)- lender assumes that it will remain vacant forever, and therefore has a deeply discounted valuation…and has not given value to development rights…

I need a lender that will move quickly, ernest money goes hard in 3 weeks. One possibility: flip deal to hospital, but then I lose the building pads!

Looking for a $1.5 1st. and will need development & construction perms (post lease-up)

I’ve done the environmental, survey, title, engineering, land plan etc…

Any help here would be greatly appreciated.

Re: LTV on commercial deal - Posted by MN~Chicago

Posted by MN~Chicago on November 30, 1999 at 11:23:17:

Do you have an appraisal?

I might be able to help you on
a bridge loan.

If you have an appraisal, fax
it to me along with the particulars,
including LTV.