Boca Raton, FL, February 7, 2018: QuickLiquidity, an opportunistic real estate private equity firm investing in commercial real estate nationwide, has announced that it has funded a $1.4 million second mortgage on a $50 million shopping center located in a suburb of Kansas City, MO.
The borrower, who is an experienced developer, had approached QuickLiquidity looking to monetize their equity in a 235,000-square-foot shopping center without refinancing their existing first mortgage. The borrower had recently created significant equity in the shopping center by redeveloping it and securing new long-term leases with national tenants such as Hobby Lobby, Academy Sports + Outdoors, Homegoods, Off Broadway, Petco and Ulta. With the newly redeveloped property value estimated at around $50 million and the borrower having a first mortgage of around $32 million, the property is around 65% leveraged.
While the borrower plans on selling the property over the next 12 months, they needed immediate liquidity of $1.4 million to reinvest into a separate commercial real estate project. The borrowers existing first mortgage lender would not increase their loan for the purposes of a cash-out, leaving the borrower with a limited amount of financially feasible options to quickly monetize their equity. If the borrower were to refinance their first mortgage with a new lender the closing costs and fees to replace the $32 million of debt would be significant compared to the relatively small $1.4 million cash-out amount. With a refinance the borrower might also lose their existing low interest rate and the loan could take months to close.
QuickLiquidity offered a solution by providing the borrower with a second mortgage on the property. This saved the borrower a ton of money in fees and provided them with the capital they needed in the time frame they needed. QuickLiquidity’s second mortgage was done in full compliance with the borrowers existing first mortgage.
“We work with commercial real estate owners, developers and limited partners who have a significant amount of equity in their property but few ways to monetize it”, says A. Yoni Miller, Principal of QuickLiquidity. "As a direct lender and preferred equity investor, we create tailored investment solutions to help our borrowers monetize their equity without disturbing their existing first mortgage."
