Liberty SBF Closes On $1.1MM SBA 504 Loan For a Hotel Acquisition in Palm Springs, CAMarch 22, 2015
Certified Development Company brings bank turndown deal to Liberty SBF because of its reputation for listening to a borrower’s business plan.
Los Angeles, CA – Liberty SBF, a full-service commercial real estate finance company, recently provided a $1.1MM first lien SBA 504 Loan from its own balance sheet for the acquisition of a 24-room, 33,330 square-foot, non-flagged hotel in Palm Springs, CA. Liberty SBF also provided an interim second lien loan so the borrowers could quickly close while waiting for the second lien that will be provided by a Long Beach, CA-based Certified Development Company (CDC).
Liberty SBF provides first lien SBA 504 loans nationwide and works with a Certified Development Company to secure the second lien mortgage. Liberty SBF also works with other third party SBA 504 first lien lenders to provide interim financing on the second mortgage if needed.
The CDC brought the deal to Liberty SBF seeking assistance after a bank had turned down the loan. Three business partners with a successful history in marketing and management of commercial real estate properties were purchasing the underperforming resort because they saw huge potential for the right owners. The resort had been underperforming but after Liberty SBF researched the history of the property, the business plan and the background of the new borrowers it found the deal to be solid.
The property location was ideally located blocks from the entertainment center of downtown Palm Springs also known as “the strip” and 10 miles from Palm Springs airport. Despite the fact that the resort had a history of underperforming, revenues had actually been increasing since 2012 and the borrowers saw it as a good time to buy. They planned to use their business acumen to continue the upward trend. By rebranding the hotel, performing about $200,000 in renovations, and installing an experienced local management team to focus on marketing and reservation system upgrades the owners expected occupancy and profits to increase dramatically.
“Rather then writing it off we were able to research the market and listen to the borrower’s business plans to improve the property,” said Ryan Roque, the originator in Liberty SBF’s Los Angeles, CA office who helped to guide the deal toward closing. “This individual attention and due diligence allowed us to not only help the borrower’s finance a bank turn down at 80% LTV but also finance the $200,000 for improvements.”
About Liberty SBF
Liberty SBF (Liberty) is a full-service commercial real estate finance company that provides loan origination, loan servicing and asset management. Liberty has a special expertise in small-balance commercial lending, lending directly from its balance sheet and originating loans for its investment partners. With offices in Philadelphia, New York, Los Angeles, Boca Raton and New York, Liberty originates loans across the United States. For more information about Liberty SBF, please visit http://www.libertysbf.com.