Donald Braun, president of the Frisco, TX-based Hall Financial Group, tells GlobeSt.com that the speed to market could be "inside of two weeks if someone comes to me with the right deal." The more common scenario would garner final signatures in 30 to 60 days on a combo package with first mortgage and mezzanine capital for transactions ranging from $5 million to $30 million. "What we really want to do is effectively create one piece of paper," he says of the add-on product for the group's lending line and a complement to the mezzanine program.
The three-year loans, with extension options, carry a floating interest rate of Libor plus 600 to 800 basis points and a 24-month pre-payable penalty clause. According to Braun, hotel financing is available at an 80% loan-to-value ratio and other properties, a 90% LTV. "We are seeing more opportunities in the hotel sector, quite a few opportunities in condos and looking and expecting to see opportunities in office," he says of a pool primed with quick acquisition capital.
Braun projects the first year's volume will be $75 million to $100 million. All value-add, income-producing property types in all US markets are candidates for the $100-million lending pool. But, he emphasizes, lending doesn't stop at $100 million since the plan allows for pulling in other lenders for a piece of the action, if necessary.
Braun stresses that the deck isn't stacked for a loan-to-own program. "As a program, we've not foreclosed on any assets. We have had a number that have gone to term and in some cases we have done amendments and modifications," he explains. "Track record-wise we don't have a loan to own, but from an underwriting standpoint we have to reach the conclusion that we would be comfortable in owning the asset if it came to that.
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