Condo Construction Loan – Refinance and Recapitalization

The Problem

A $26,000,000 condo project was over budget due to a nearly 2-year delay resulting from an undiscovered utility easement. The developer needed to increase funding due to higher construction costs associated with the delay, along with costs incurred to redesign the building to satisfy the easement, and re-load an interest reserve. The existing lender did not wish to extend the term of the loan or increase proceeds.

The Approach

Our firm was hired to refinance the debt with a new lender. While the cost of the project had indeed increased, the value of the condos upon completion had also increased, and our team able to demonstrate to a two-bank syndicate the value proposition.

The Results

The two-bank syndicate was able to provide additional proceeds and, more importantly, additional time with which to complete the project. Additionally, the client obtained a lower interest rate and lower carrying costs.