|Lender Meets Different Needs
Commercial Mortgage Insight
Reprinted with permission from the October 2000 Issue
Meecorp Capital Markets of Fort Lee, N.J. provides bridge and mezzanine financing as well as permanent conduit financing. “We pride ourselves in being a one-stop funding source,” says Daniel Edrei, director.
Its permanent financing is for standard property types, but it bridge loans can finance any types of property in addition to land deals. The company can include all three types of financing or just one in one deal. “We’ll look at everything,” Edrei says. “We can do a whole package. It’s nice to see it from beginning to end.”
Amounts are generally $2 million and up for permanent financing and $1 million and up for bridge and mezzanine financing, although the company can finance smaller amounts, he says. Able to syndicate larger amounts, the company has no upper limit.
Permanent financing meets standard conduit terms. Bridge terms generally entail 12% to 15% interest rate with three points. “It’s an alternative to taking on a partner,” he says. “It’s like we’re stepping in as junior partner for a limited time. For many of these deals it’s the only type of money available.”
Bridge terms are generally for three years but can range from one to five years or as long as needed. Bridge loans are typically recourse, but may be non-recourse if the borrower signs a “good guy clause,” promising to relinquish the property in default. The loans typically entail fixed rates, although larger amounts may have float rates.
Bridge loans exit fees are typically about 10% of the loan amount, but can be significantly less if the property has strong income. The company is flexible in structure deals, Edrei explains. “It all depends on how much we like the deal,” he says. “The bottom line is if I know I can go permanent on it, we’ll be as competitive as possible. We love the rags to riches stories. We’re businesspeople. We’re not bankers in the traditional sense. If it makes sense, we’ll structure the deal.”
Its mezzanine financing can equal up to half the remaining equity. For example, on a deal that would have an 80% LTV, the company can furnish 10% mezzanine financing for a total LTV of 90%. Typically, the blended rate is up to one point higher than conventionally permanent financing.
It can use previously completed Phase I environmental site assessments and previous appraisals completed by reputable firms. Using comps form the previous six months, appraisals are key, he adds.
Daniel Edrei is a Director of the Principals Group at MEECORP CAPITAL MARKETS,
a New Jersey-based commercial real estate lender providing fast, creative funding solutions nationwide. Meecorp specializes in non-conforming transactions such as Bridge loans, Mezzanine/ Equity loans and Sale-Leasebacks (including land and construction), ranging from $1Million to $100Million and above. You can reach Daniel via email at Daniel_Edrei@Meecorp.com or by calling 201-944-9330 ext. 103.