|
The $3,235,000 loan for which you would be a co-guarantor
will be secured by a 1st deed of trust on the Project and will represent only
36% of the "as proposed" value of the Project. The developer
has agreed to pay NetLeaseX (and/or other guarantors) (a) approximately $3,000
per month for the term the loan is outstanding, adjusted for principal pay
downs, and (b) a $200,000 exit fee at the earliest of 2 years or payoff of the
loan. In June, 2000, the developer purchased 89 acres and is under
contract to purchase a 2 acre adjacent parcel. This land will comprise
the ground for the Project, as shown by the developer's site plan.
The plans include building, in the middle of the Project, a bowling alley, for
which the developer has already signed a 10 year lease, and an 8 screen movie
theater, for which the developer expects to sign a lease by March 1, 2006. To avoid having the bowling alley and movie theater bring
down the profitability and yield of the Project, they will be owned and
financed separately from the Project. However, since they are located in
the middle of the Project, they will serve as anchors for the Project.
The Project will include only the high margin, high yield parts of the overall
development. After completion of the site work and development of the
bowling alley and movie theater, the developer believes that the Project, not
including the bowling alley and movie theater, should be worth approximately
$9,700,000. The developer has had discussions with a number of
prospective tenants, which are expected to sign leases after construction commences
on the bowling alley and movie theater, as detailed in a spreadsheet which is
available for review at your request. For example, a major national
restaurant franchisor is looking to purchase 4 restaurant pads for
approximately $1,750,000 and a national bank is looking to purchase an outlot
for $450,000. In addition, the developer has received substantial
interest from a party interested in purchasing a gas station for $1,200,000,
which can be built for $400,000. The developer would use the proceeds
from these sales to pay down the Loan, and, if all of these sales close as
planned, the Loan will be paid in full. If you prefer to earn the $200,000 exit fee at closing
rather than waiting until the developer pays off the Loan, you could propose to
the developer to increase the loan to $3,435,000. In order to pay the
increased debt service on the increase in the loan amount, you could lower the
amount of the monthly guaranty fee you otherwise would receive.
Alternatively, if you are interested in the above transaction, but prefer not
to guaranty the loan, you could make the Loan to the developer yourself on the
same terms provided above. If you would like to review a detailed Executive Summary
regarding this loan guaranty proposal, please reply to this e-mail. We
expect to move forward promptly on this transaction, so I will need a response
immediately if you are interested.
--~--~---------~--~----~------------~-------~--~----~ [RealEstateDeals] A part of http://realestatezoo.com Apply online for commercial real estate loans in just minutes at http://realestatezoo.com
You received this message because you are subscribed to the Google Groups "RealEstateDeals" group.
|
- [RealEstateDeals] Loan Guarantee on a $3,235,000 1st D... Ronald B. Zimmerman
- [RealEstateDeals] Loan Guarantee on a $3,235,000 ... Ronald B. Zimmerman
