Industrial Building

East Providence, RI

Clubhouse Capital secured a $1.4 million bridge loan to retire maturing bank debt. The property owner was involved in litigation with a former tenant at the time the loan matured and was thus unable to secure conventional financing. Clubhouse Capital arranged for the purchase of the bank loan (at par) by a private fund. Simultaneously, the loan was modified to provide for monthly payments of “interest only” at roughly the same dollar amount as the owner’s P&I payment under the original bank loan, to avoid any resulting cash flow burden on the borrower. In this way, the fund was able to achieve a premium yield to induce it to acquire the loan, and the transaction did not require the repayment of a junior mortgage loan that had not yet matured — keeping the investor’s LTV at an acceptable level. (Fall 2016)