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Banking and Finance Debt & Equity

Borrower ticks all the right boxes with secondary market opportunity

MLK Real Estate Capital (arranged bridge financing on behalf of a Kentucky-based developer for the adaptive reuse of a vacant 250,000 s/f office property in downtown Louisville.

The financing opportunity was originated by managing principals Solomon Kinraich and Ryan Goldstein, who also led the execution of the transaction.

“We were drawn to this assignment by the quality of sponsorship and the complexity of the opportunity,” Goldstein commented.

“Despite the secondary market location and lack of in-place cashflow, this financing presented a compelling opportunity to lenders due to a number of important risk-mitigating factors.

“Namely, all entitlements were in place with schematic drawings completed and a clear path to construction permits, construction costs had been fully vetted by the sponsorship’s internal and external construction personnel based on comparable completed projects, the sponsorship had invested a significant amount of its own equity into the project, and a fully executed franchise agreement was in place with a major national hotel brand operator that had committed to contributing significant key money to the project.”

The bridge loan funded payoff of in-place debt and will fund a significant portion of the project’s predevelopment costs.

The sponsor intends to complete planning and entitlement work over the next several months and to subsequently commence construction of the $53 million redevelopment phase, for which MLK anticipates raising additional capital.

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