Kennedy Funding Closes Refinance of Retail Portfolio
Loan Covers 166,000 Square Feet of Properties in Florida and Georgia
ENGLEWOOD CLIFFS, N.J., June 27, 2012 /PRNewswire/ -- Kennedy Funding has completed a refinancing of a portfolio of three retail properties in the Southeastern U.S. The financing covers a total of more than 166,000 square feet of properties in Florida and Georgia.
"While the three properties have a combined vacancy rate of nearly 40%, they generate enough cash flow for the loan to make sense," said Gregg Wolfer, COO of Kennedy Funding. "This refinancing will put the ownership in a position to pay off the existing first mortgage, putting them at a better price point. The differential will thus provide the capital necessary to stabilize and manage the properties better.
"The banks increasingly aren't willing to provide the financing required to insure the success of properties such as these," said Wolfer. "Kennedy Funding, a leading hard money lender in bridge loans, recognized the potential upside and provided the necessary financial support."
The portfolio includes a 38,768-square-foot building in Palm Bay, FL, leased to Blockbuster. "The issue was Blockbuster's bankruptcy and acquisition by Dish, which was not interested in renewing the lease," said Wolfer. "The property will likely go dark at the beginning of 2015. The new financing will provide the means to re-stabilize this property."
The second property is a 54,530-square-foot two-tenant, big box center in Palatka, FL. One of the tenant spaces is occupied on a long-term basis by Staples, while the other is currently vacant. The third property is a 73,000-square-foot shopping center in Atlanta, GA, including a separate building housing a Rite-Aid pharmacy.
"The bottom line is that the banks don't want to be involved with 'problem' properties," said Wolfer. "The reality is that there are a lot of opportunities right now, in the wake of the recession, with borrowers that either have to pay off existing debt, or notes are due, or they simply can't continue to make payments at their current price point. We're here to help those borrowers looking for a fresh start with a new loan.
"In this particular case, as in a number of our other recent transactions, there is a lot of upside for re-stabilizing these properties by increasing occupancy and making other capital improvements, and to do it with funding at a better price point than going the conventional route," he said. "There are lenders such as Kennedy Funding that are still willing to take a little bit of a risk in order to take advantage of the upside potential."
Kennedy Funding is a commercial real estate lender specializing in unconventional financing where speed and attention to special circumstances are critical. The firm provides quick loan closings of between $1 million and $50 million with up to a 65% loan-to-value ratio.
SOURCE Kennedy Funding, Inc.
Share this article