Structured and arranged long-term fixed-rate senior debt to recapitalize a 31,000-square-foot shopping center next to the Hard Rock Casino in Las Vegas, Nevada.
Challenges
The closing had stalled with a potential lender and the existing financing was coming due shortly. Most of the leases had less than a year of seasoning, making it difficult to count percentage rent. Furthermore, historical billboards were difficult to calculate due to gaps in operating history.
Solutions
Advised client to switch lenders and focus on fixed-rate vs. floating-rate debt due to ability to structure holdbacks for remaining vacancy. Doing so increased proceeds, decreased the rate and removed interest rate fluctuation risk for the anticipated long-term ownership. The convinced lender that annualizing actual trailing operations was supportable due to the centers proximity to the Hard Rock casino across the street. Consulted borrower to sign a one-year fixed rent lease for the billboards, enabling lender to include said operational revenue into its sizing calculation.
