The borrower, an experienced commercial real estate investor who is asset rich but was temporarily liquidity poor, needed to quickly access capital in order to take advantage of a time sensitive investment opportunity. The borrower proposed a pledge of a 10% ownership interest in a commercial real estate syndication he had formed in 2015 to purchase and convert a vacant retail property into a climate controlled self-storage facility, which is now completely stabilized and cash flowing.
Due to the borrower being the sponsor of the investment, the individual who lead the charge to identify, acquire, convert, and stabilize the property, his 10% interest is entitled to receive a 35% sponsor promote. Meaning that after all of the investors original principal investment is returned and in additional to them receiving an 8% annual preferred return, any remaining profit from the investment is split 65% to the 90% investors and 35% to the borrowers 10% ownership interest. Based on the appraised value, the borrowers proceeds at a sale would well exceed $2 million. Even though the borrower has a significant amount of equity compared to his $1 million loan request, because his interest is both illiquid and non-controlling, the borrower was unable to find any lender willing to use his interest as collateral until he was introduced to QuickLiquidity.
QuickLiquidity has built a reputation for being the go-to lender for funding the commercial real estate deals other lenders won't, all while providing quick underwriting, flexible terms, and certainty of execution. Their investment strategies include first mortgage bridge loans, second mortgages, mezzanine financing, and providing liquidity to minority interest owners in real estate partnerships through either purchasing or lending against their ownership interest.
The borrower received a term sheet from QuickLiquidity within only days of submitting his loan request. It then took a little over two weeks from when the term sheet was fully executed for QuickLiquidity to document and close the loan. QuickLiquidity worked with the borrower to ensure the loan was done in full compliance of the first mortgage loan documents and the entities operating agreement. By working with QuickLiquidity, the borrower was able to receive the capital he needed in the time frame he needed.
We have a tremendous amount of experience with purchasing and lending against minority interest positions in commercial real estate partnerships, which allows us to understand and close complicated deals quickly, states A. Yoni Miller, Principal of QuickLiquidity. Helping our borrowers with time-sensitive and complex transactions is at the heart of what we do every day. Our success is not only determined by the returns we generate, but by the relationships we build.
When life presents unpredictable situations and liquidity is needed, limited partners can turn to QuickLiquidity. QuickLiquidity is a direct buyer and lender against limited partnership interest in commercial real estate LLCs, LPs, TICS, and DSTs.