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Completed CRE Bridge Loan Transactions in Michigan
Sherpa Capital Group, a direct private lending firm based in Chicago, funded a $925,000 1st lien position bridge loan for the acquisition of a car wash real estate in Pontiac, Michigan, a suburb of Detroit. We funded 77% of the $1,200,000 purchase price, while the Borrower contributed 23% cash at closing. The purchase price was below market. The Borrower is a real estate investor seeking to expand in the car wash industry. Both Borrowers are doctors (with excellent credit and significant assets). They were looking at car washes for a few years until they found the right deal. All of our deals have personal guarantees. This was the Borrower’s 1st car wash. They needed to close quickly before year end to take advantage of favorable tax planning (accelerated depreciation). The SBA lender was not able to close the deal within the short timeframe. The SBA loan was pre-approved which made us comfortable with the exit as well. Conventional financing could not close within the timeframe and Sherpa Capital Group LLC was able to complete diligence, site visit and provide financing within 3 weeks. The Borrower’s exit strategy is to make improvements and refinance with an SBA lender within 12 months. The property was in fair condition. The interest rate was 12% and we charged 3% origination points. The loan term was set at 9 months. This purchase bridge loan was funded in December 2022.
Sherpa Capital Group, a direct private lending firm based in Chicago, funded a $600,000 bridge loan for the purchase of a 266-unit self-storage facility located in Flint, Michigan near suburban Detroit. The estimated purchase price was $790,000. Sherpa Capital funded 75% of the purchase in 1st lien position, and the Borrower contributed a 25% cash down payment. The property was approximately 35,000 square feet. It was in good condition and was already partially rented at closing. The Borrower had good credit and owned a portfolio of self-storage properties. They needed to close quickly as the property was sold out of a bankruptcy. The trustee wanted a quick sale, and the Buyer wanted to take advantage of the substantial discount offered. Sherpa Capital was able to provide financing within 2 weeks. The Borrower had significant cash equity into the transaction. Their exit strategy was to stabilize the property with some improvements and refinance with an SBA lender. The loan term was set at 12 months. This bridge loan was funded in May 2016.
$5,1MM senior bridge loan for the purchase and renovation of a 70,000 square foot office building in Grand Rapids, Michigan. The 1980’s vintage building had dated common areas that needed capital. Like many in the suburban Grand Rapids office market, the previous owner was faced with either investing additional renovation capital to attract top-tier tenants or discounting rents to maintain occupancy. The owner decided to sell the property instead. Before closing, the Borrower had already been in contact with almost all of the tenants in the building, who were obviously excited about the upgrades to the property. Many were quick to offer extensions to their existing leases and some actually took more space. After completing the renovations, the Borrower plans to refinance with an institutional lender. This transaction was completed in April 2015.