Financial Compound performs a $7 million hospital refinance for a hospital in southern CA. The refinance was part of the borrower’s re-organization plan as it emerged from Chapter 11 bankruptcy. The property includes approximately 100,000 s.f of 1960s construction and is occupied by two tenants. The first tenant, comprising about 70,000 sf was also in bankruptcy due to a dispute with its accounts receivable lender. Their business started in 1999, first year of profitability was 2003 due to licensing issues, operates in 2 hospitals both owned by borrower. The second tenants, occupying about 30,00 sf is agovernment mental health entity, in occupancy since 1997, currently on month-to-month sublease from the other tenant.
Borrower purchased property in 1997 for approximately $4 million. Many commercial mortgage lenders would not make this loan due to the nature of the borrower’s and largest tenant’s bankruptcies. However, Financial Compound works with a number of commercial mortgage lenders who consider these types of bankruptcy re-organization financings. Our loan replaced the first and second TD’s of $8,400,000; 2nd TD lender accepted a discounted note pay off due to tenant’s bankruptcy. Loan terms included a 5 year loan, 12% fixed interest rate, no prepayment penalty, and non-recourse. The loan also allows for secondary financing from a third party.
Financial Compound is able to assist borrower and lenders with chapter 11 bankruptcy re-organization financings. Having been active in the real estate capital markets for more than 15 years this commercial mortgage broker has worked with many niche type lenders that offer creative financing solutions for transactions where most lenders would not be interested. With respect to bankruptcy filings, we are able to provide DIP loan proceeds as well as bankruptcy re-organization financings.