Success Stories

  • Takeover in July 2010
  • Resolution in May 2011
  • Lender Recovery: 106%
  • BOVs at Takeover: $6.0MM UPB at Takeover: $7.1MM BOVs at Resolution: $7.5MM

Lone Tree Center

36,000 SF Shopping Center in Brentwood, CA
The property is a retail strip center shadow-anchored by a WinCo Foods located in Brentwood, CA, approximately 60 miles northeast of San Francisco in the East Bay. Brentwood suffers from significant over-development and a high foreclosure rate. At takeover, the property was 64% occupied with no leasing activity, several tenant delinquencies and deferred maintenance.

Action

Immediately after the Receiver took possession, various cosmetic items were completed including replacing landscaping, pressure washing all sidewalks and facades and removing trash, which dramatically enhanced the appearance of the asset. During the Receiver's possession, one lease was renewed and three new leases were signed representing over 15% of the asset. The new leases were signed at higher base rents than in-place leases, establishing a new market rent for the asset. These leases stabilized the property, significantly increased property cash flow and incentivized the borrower to cooperate with the lender to modify the loan.

Outcome

The loan was modified by the lender in May 2011. The modification included 18 months of interest-only as well as additional collateral from the borrower in form of as debt service and TI/LC reserves totaling over $700K (>10% of UPB). All of lender's out-of-pocket expenses were reimbursed by the borrower and additional cash was put into reserves resulting in a recovery above par.