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LOS ANGELES-A joint venture of locally based CB Richard Ellis Investors and Napa-based US Advisor LLC has secured a $150-million bridge loan line of credit that will enable the partners to close quickly on property purchases. The arrangement will provide what Frank Satterfield, founder and principal of Houston-based Harbor Capital, calls “a competitive advantage because of the capability to close quickly.”

Satterfield, who arranged the financing, tells GlobeSt.com that the bridge loan means, in essence, that the CBRE Investors-US Advisor partnership will be able to close on deals after a 30-day due diligence period rather than the 60 to 90 days from start to finish for most acquisitions using life insurance company, conduit or agency loans. Satterfield arranged the bridge loan line of credit with Philadelphia-based RAIT Investment Trust, a publicly held commercial real estate direct lender. He explains to GlobeSt.com that the partnership of CBRE Investors and 1031 specialist US Advisor will be able to buy a property on an all-cash basis with the bridge loan, then pay off the short-term bridge loan after securing permanent financing plus equity from 1031 investors.

“The bridge loan will give them a competitive advantage in the marketplace where they can put a property under contract and then close it immediately after due diligence is complete,” Satterfield says. He says the loan agreement authorizes the partners to pay up to 90% of the acquisition costs via the bridge loan, with CBRE Investors and US Advisor to contribute the remaining 10% of equity.

“The sellers will get all-cash contracts that will not be subject to any financing contingencies,” Satterfield tells GlobeSt.com. “We’re talking about pretty sophisticated sellers here. If you can go to them and say that you have all of the capital in place to close a deal, and all you have to do is go through the standard 30-day due diligence, that’s a pretty strong tool and a competitive advantage.”

Harbor Capital considered proposals from other lenders for similar bridge loan lines of credit, but it chose RAIT because its proposal doesn’t require the borrowers to obtain permanent financing from RAIT. “This gives the partners the flexibility to secure their permanent financing from any and all sources out there, as opposed to having a bridge facility that would require them to obtain permanent financing from the same lender,” Satterfield says. Many lenders that provide bridge loans use the loans to feed their permanent loan pipeline and those arrangements often impose “substantial exit fees” if the borrowers don’t convert their bridge loan to a permanent loan with the same lender, Satterfield points out.

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