Breakwater Restructures TIC Property in New Record Time of 102 Days

Share Article

Negotiates Reduced Loan Payoff and Provides Bridge Financing to Save Property

“Our property was in foreclosure and Breakwater quickly developed a successful strategy to get the original lender to delay the foreclosure and reduce the loan payoff.”

Breakwater Equity Partners has completed the debt restructuring and refinancing of a tenant-in-common (TIC) property in 102 days, start to finish, a new record for the commercial loan workout and investment firm. After reaching an agreement with the original lender, Breakwater guaranteed a new loan and directly provided the investors with over $500,000 in interim financing.

After reaching loan maturity last fall, the owners of Embassy Plaza hired two different law firms to try and get the lender to modify the terms of the loan on the Omaha Nebraska property. The law firms were unsuccessful. The owners also hired a mortgage broker who was unable to obtain new financing. The property faced financing difficulties because of its diminished value and the cumbersome tenant-in-common ownership structure.

“After the lawyers failed to restructure our loan and after the mortgage brokers failed to refinance our property, we knew that we had a very serious problem,” said Sam Brenner, a member of the Embassy Plaza Steering Committee. “Our property was in foreclosure and Breakwater quickly developed a successful strategy to get the original lender to delay the foreclosure and reduce the loan payoff.”

Breakwater then provided the mandatory guarantees for the new loan. The new financing is at a 5.00% interest rate that is fixed for 10 years, with a 30-year amortization. “We believe that interest rates are going to increase in the near future,” said Armand Nicholi, Breakwater CFO. “Breakwater has worked hard to develop solid relationships with strong lenders that enable us to lock in favorable interest rates on large commercial loans.”

The new lender required that the borrowers provide funds to update the interior of the building. This left the owners facing a funding shortfall which threatened to derail the new loan. “Breakwater advanced the owners over $500,000 so that we could save the property,” said Robert Bartley, an investor in Embassy Plaza. “The loan guarantees and bridge financing were absolutely critical to our success.”

“Underwriting a commercial real estate loan in this market environment is not easy; most loans that reach maturity cannot be refinanced without a financially robust guarantor. Our staff spent more than 500 hours on lender due diligence and document review,” explained Phil Jemmett Breakwater CEO. “We appreciate the cooperation and support of the Embassy Plaza TIC investors who enabled us to complete the loan workout and refinancing in just 102 days.”

About Breakwater Equity Partners
Breakwater Equity Partners is a San Diego-based commercial real estate workout consultancy and investment firm. Through Breakwater’s extensive experience on over 200 engagements with loan values in excess of a $2.5B, the firm has devised a unique, multidisciplinary approach to uncovering and resolving distressed asset situations. Breakwater’s professional team combines legal, financial, economic, banking, and real estate expertise to devise customized strategies for each case regardless of market (gateways to tertiary), asset class (single and multi-family, office, flex, multi-tenant land, time shares, development, power centers) or loan type (portfolio or CMBS). Please visit our website at http://www.breakwaterequity.com to review case studies on representative deals.
Breakwater Equity Partners, please call 858-490-3630 or visit http://www.breakwaterequity.com.

Share article on social media or email:

View article via:

Pdf Print

Contact Author

Danielle Gruden
Elle Communications
208.447.9232
Email >
Visit website