Ryan Hare

Apartment Acquisition Equity and Debt Financing: Remington Financial Group and Its Lender Deliver 100 Percent Financing

06-17-09

A home builder based in New Jersey wanted to introduce income producing real estate properties as a means to diversify its real estate holdings. Most of the company's capital, however, was consumed by home construction and lot inventory; as a result the company did not have sufficient equity to acquire new real estate. What they did have was a contract of sale on a property. The builder, aware of RFG and its lending capabilities, contacted the company to coordinate the equity and debt in order to secure 100 percent financing to acquire the apartment complex in Delaware.

Originating the transaction out of its Philadelphia office, Remington Financial Group demonstrated to its lender that the builder's contract of sale created value for a JV equity investor. By properly staking the deal with 100 percent of the required equity, the deal began to attract competitively priced 80 percent LTV non-recourse financing. The equity capital received a preferred return and 50/50 share of profits.

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Ryan Hare
Remington Financial Group

Ryan Hare: Commercial Lender in Scottsdale, AZ

Office: (480) 361-6976

Mobile: (480) 734-0507

Correspondent Lender with over 17 years of experience and over $6 Billion in funding since our inception in 1993. RFG lends $1Million and upwards with the resources to lend Internationally.

About Us:

Remington Financial Group has forged a solid reputation as an investment banking company. Since 1993, Remington Financial Group has secured capital and offered financial services to business, real estate and development/construction projects worldwide.

Remington Financial Group's services include origination, evaluation, structuring and preparation of finance packages, negotiation assistance, and placement coordination along with closings. Internationally, Remington Financial Group generally handles transactions over $5 million, though projects have run into the tens of millions.

Remington Financial Group employs a distinctive, highly disciplined transaction method that differs from most conventional processes. Each transaction is expertly customized to help clients gain maximum benefit from Remington Financial Group's unique brand of integrated financing.

Remington Financial Group's track record of successful transactions includes real estate, land development, hotels and resorts, and corporate transactions, all of which serve to demonstrate the effectiveness of the Remington approach.

Areas of Expertise

Senior Debt/Equity Financing

All Property Types
$1 Million and up
Acquisition, Development, Refinance, Bridge, Principal Buyout, Special or Story Situations

Mezzanine/Bridge Loan Financing

All Property Types
$1 Million and up
Aggregate Leverage up to 85%
Loan Term up to 8 Years
Amortization up to 25 Years
11% - 14% Annual Interest Rate
Non-recourse Subject to Carve-outs

Multifamily

Existing Apartment Properties with 5+ Units
Mobile Home Parks
Limited Mixed Use
$1 Million and up
Nation Wide
6 month, 3, 5, 7, & 10 Year Fixed Terms
15-year Fixed Fully Amortized
Bank Rates
Minimum DSC 1.20
80% LTV for Purchase, Rate & Term Refinance
75% LTV for Cash-out Refinance

Joint Venture Financing

100% Financing
Construction, Developments & Acquisitions
$1 Million and up

Remington Arranges
Specialized Financing For:

Apartments & Mixed Use
Assisted Care Facilities
Bridge Loans
Business Investment Capital
Business Loans without Real Estate
Commercial Properties
Special Purpose Properties;
e.g. Car Washes
Construction Loans
Entertainment & Multi Media
Equity/Debt; 100% Financing
Equity Capital
Franchise; up to 100% Financing
Hard Money
Hotels/Motels
Land Development; up to 100%
Mixed-Use Commercial
Multi-Dwellings
Non-Conforming Commercial
Real Estate
Office Buildings - Industrial &
Retail Properties
Operating Capital
Retail Space
Working Capital

Testimonials

Remington Financial Group in an unsettled market is consistent and stable. Their unprecedented Analysis, Service, Commitment and Communication are what sets them apart. When the recent market is doom and gloom all they want to know is "HOW CAN WE HELP". Whether it be an Investment Opportunity, International Development, or a Challenging Problem, Remington Financial Group stays committed to finding Creative Competitive Financial Solutions.

Thanks RFG for your great communication and constant commitment.
- R. Ramsey II

If issues arise with a transaction, RFG always puts forth great effort to recognize it, and immediately responds to our clients with solutions. RFG's servicing of commercial loans and requests during Due Diligence is the fastest I've ever seen. RFG uncovers the true merit of the deal and creates options for financing that traditional sources cannot.
- J. Medlock

When dealing with financial transactions, you need a company that has a proven track record, cares about their clients and understands the importance of each project. RFG not only possess these traits, they also provide many other attributes that make their organization one of the best in the business. I look forward to long and successful relationship with RFG.
- B. Owens

Because of its expertise with alternative financing, RFG is the only group that will look at certain projects - it doesn't shy away from challenging deals. I work with programs that no one else can work with and I can't do that without a company like RFG
- J. Couch

I was attracted to RFG because the company is fairly aggressive when it comes to making a deal, and it has a good history of recent closes. The people at RFG are responsive and return my email or phone messages immediately. The originators go out of out of their way to answer not only my questions, but questions directly from my clients. Remington's LOI and due diligence policies are spelled right out - there is no confusion. If the client can meet the requirements and has a good deal planned, securing funding through RFG should be no problem.
- C. Hanley

$282.3 Million for Eclectic Acquisitions

An institutional equity investor has obtained an aggregate of nearly $282.3 million to acquire two separate and diverse portfolios. One consists of 14 office and warehouse buildings. The other contains four independent living properties in two states. In both cases, locally based Remington Financial Group Inc. arranged debt and bridge financing.

With nearly $142.3 million in funding from a global financial services firm, the investor and an operating partner have acquired a 2.7-million-sf office and warehouse portfolio for an aggregate cost of $150 million. The assets are spread across 10 Midwestern and Southeastern states and are being acquired from three separate sellers. The sellers of two of the buildings are the properties' respective occupants. One real estate investment firm is the seller of the other 12 properties.

"Each building is fully occupied by a different single tenant, and all are sale-leaseback agreements," RFG says. "Because all of the tenants are private companies with no public credit ratings, arranging the financing required extraordinary due diligence to make both the buyer and the lender comfortable with the transaction," RFG says. Furthermore, one of the properties, a 1.2-million-sf flex property in the Midwest, represents half of the portfolio, "potentially presenting a big risk."

RFG structured a $108-million non-recourse, permanent 10-year mortgage at a fixed rate of just more than 6 percent, which represented 75 percent of the acquisition cost. It was collateralized by the properties, but not crossed. The same lender provided a bridge loan of nearly $34.3 million to increase the loan-to-cost ratio to 97 percent. This has a five-year term beginning at Libor plus 200 basis points for the first two years, and Libor plus 100 for the remaining term.

In a separate transaction, RFG arranged $140 million in debt and bridge equity financing for the same buyer, in a different operating partnership, to acquire three independent living communities in the Dallas area and a fourth in Kansas City, MO. All are from a single unidentified seller, who developed and operated the facilities. The properties have an aggregate of approximately 1,000 units, are about four to five years old, and have an average occupancy in the mid-80 percent.

"While they are class A assets, they aren't being operated to full potential," RFG says. "The buyer acquired the portfolio at a cap rate below 4 percent, and the business plan is to raise net operating income to an 8.5 percent cap rate over the next two to three years by improving operations and implementing high-margin services, including better quality meals." The borrower has a track record of implementing a similar plan, according to RFG, "which provided the lender with the required level of comfort."

The lender is one of the world's leading financial management and advisory companies. The senior financing is for a three-year term at a floating rate that RFG says is Libor plus 200 basis points. It is joined by a two-year bridge loan from the same lender at Libor plus 450 points. The full funding represents 97 percent of the portfolio's purchase price

Sale/Leaseback Financing: $9.4 Million for Manufacturing Client

A 40-year old, New Jersey-based manufacturer engaged Remington to restructure its existing defaulted financing and recapitalize the company's operations. The company, which included a 90,000 square foot office/manufacturing facility, had a long track record of generating profits. Three years ago it found itself in a precarious financial position after losing several top customers to competitors. The situation meant that the company ultimately put its bank financing in default.

RFG provided the company with a full range of financing options to correct its problems. Moving quickly to solve several problems at once, the sale leaseback option was chosen. By selling its real estate to one of RFG's investors, the company received 100 percent of the building's market value, engineered a favorable long term lease that was less costly than its original debt service and provided capital to fund company initiatives to rebuild its business while simultaneously reducing its taxable exposure. The company has retained RFG as its outsourced finance department to arrange additional asset based financing as it re-establishes profitability.

$8.5M - Land Loan, Waterfront Property

Loan was used to refinance seller financing on property from 2005 acquisition.

Challenge - unentitled land where borrower was planning on developing a project with a large residential component made lenders nervous in a weak housing environment.

RFG's Solution - RFG was able to get the lender comfortable on the value of the land as a whole and on the developers plan to also include a large office/retail component that drives sales or residential lots.