As Banks Continue to Struggle, Emerald Creek Fills the Gap

NEW YORK, Oct. 24, 2011 /PRNewswire/ -- In today's economy, borrowers continue to struggle when searching for commercial financing options.  So far this year, 84 banks have been taken over by the FDIC.  Since the beginning of 2009 over 375 banks have failed, leaving a major void in the credit markets.  Given the lack of capital supply, even the strongest sponsors are relying upon alternative financing sources.

As these traditional lenders continue to tighten their belts, new sources of capital have emerged.  Firms like Emerald Creek Capital (www.emeraldcreekcapital.com), a New York based private equity fund, have begun to thrive.  Since their launch in 2009, Emerald Creek Capital has financed numerous commercial loan transactions.  All of the loans are secured on prime commercial real estate owned by strong credit sponsors.  "Under normal market conditions these loans would have gone conventional," explains Mark Penna, a Managing Partner at the firm.  "We are seeing an abundance of quality lending opportunities in the commercial sector."  

One recent closing in Mountain View, CA required an immediate response.  Emerald Creek provided an acquisition loan in just weeks to assist in the purchase of a 15,000 SF office building.  The buyer thought she had lined up conventional financing only to see that lender drag its feet.  With the purchase contract soon to expire a fast bridge loan was required.  Another recent transaction was secured by real estate in Kokomo, IN and was a purchase of a 10,000 SF office building which contained a long term lease with The Social Security Administration (GSA).  Emerald Creek provided a loan commitment in three days to ensure that the borrower's 1031 exchange requirements were met.  

In addition to acquisition financing, lenders like Emerald Creek Capital (www.emeraldcreekcapital.com) are finding opportunities in helping commercial property owners refinance their performing loans at a discount.  Pressed by regulators to reduce their real estate exposure, many of the nation's largest banks are eager to see their loans get refinanced.  To do so, they are offering steep discounts on the principal balance to incentivize their borrowers.  Over the past year Emerald Creek Capital has closed several of these discounted payoff scenarios (DPO's).

Emerald Creek's typical transaction size ranges from $1 - $10 Million, well below the radar of most Wall Street investment banks.  While the financing is not cheap, it comes with less red tape and faster execution than a regional or community bank can offer.  According to Mr. Penna these loan transactions would have met conventional financing parameters 4 years ago.  "Over the past 6 months we have received over 5,000 loan requests," explains Mr. Penna, "and while we turn down the vast majority, we are seeing incredible demand for excellent transactions."  

SOURCE Emerald Creek Capital