Stabilization Loan in Long Beach

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Stabilization Loan in Long Beach

First Capital Trust Deeds recently closed a $12,500,000 bridge to stabilization loan on an 8 story, 53,952 square foot rentable historic art deco building with basement and a roof-top deck. It’s located on a 7,500 square foot lot with an attached parking parcel and is being converted to a modern assisted living facility with ground floor retail and urgent care facilities. The property, located in downtown Long Beach, CA, presented multiple challenges as it needed remaining tenant improvement on floors 3-8. It also needed to pass several hurdles to achieve the final certificate of occupancy, including a historic designation by the City of Long Beach and certain tax credit incentive milestones. Several lenders could not get comfortable with the transaction because of the specialized use of the property in addition to the hurdles to stabilization. First Capital Trust Deeds understood the unique aspects of this transaction and partnered with a shrewd investor who understood the unique business model and was willing to underwrite the remaining construction hurdles and stabilization timeline in this low leveraged transaction. FCTD structured credit enhancements within specific milestone timelines and draw schedules to properly mitigate credit risk for the investor. FCTD also worked with the sponsor to structure a limited guarantee with limited carveouts based on the sponsor’s equity capital needs.