No Cash Flow? No Problem

The development will turn a former Albertsons into a 5-car dealership auto mall.

LOS ANGELES—Developer Hooman Automotive Group has secured a $64.5 million non-recourse bridge loan through a life insurance company for the repositioning of an Albertsons supermarket into a 5-car dealership auto mall. The undeveloped property has no cash flow, and, as a result, made it difficult to for the borrower to secure financing. PSRS was able to structure a financing package that would be accepted through a life insurance company despite the missing cash flow component.

“The borrower was looking for bridge money because anyone in the industry would assume that this is bridge deal or a hard money deal,” Antonio Hachem, VP and loan officer at PSRS, tells GlobeSt.com. “Life insurance companies, which I correspond for, typically need cash flow. “The borrower intended to reposition the property into an auto mall, so we did a market survey to see how we can back into the numbers. We master leased the property to the borrower and underwrote the deal that way. It is an owner user, but if we lost the borrower, we can recreate that cash flow with market tenants. That is how I got the deal done.”