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Bridge Loan on Two Office Buildings in Burlingame, California
A Los Angeles County developer owned two small office buildings on adjoining parcels in Burlingame, on the Peninsula south of San Francisco, through a single-purpose LLC. The existing first mortgage had to be paid off while the condominium map for the site’s planned redevelopment was still in process. Blue Fox Capital Corporation arranged a new $12,000,000 first-position bridge loan, with the junior lender staying in place behind it. The loan funded about nine weeks after the term sheet was signed.
The situation
The buildings were partly leased, mostly to medical offices, and the developer had the site entitled for a new residential condominium building. The developer needed a loan that would pay off the first-position lender, leave the existing junior loan subordinate, and give enough time to finish the final map and public report and arrange construction financing. Title was the problem. Two earlier loans had been paid off but never cleared from the record. The junior lender had recorded a deed of trust on each parcel for the full amount of its loan, so the public record showed twice the debt actually owed. No ALTA survey existed, and the final map and the state public report were still pending.
What the file needed
- Preliminary title report, entity documents for the LLC, current leases and a Phase I environmental report.
- The condominium map, conditions of approval, construction documents and the architect’s agreement, plus the status of the final map and the public report.
- A payoff demand from the existing first lender.
- Zero-balance demands or closing statements proving the two earlier loans were paid, and a title supplement removing them from the record.
- Guarantor personal financial statements, a résumé, a company background and a summary of completed projects.
- A subordination agreement from the junior lender, with one of its two liens subordinated and the duplicate reconveyed.
- The borrowing entity’s tax ID and servicing contact, and property taxes brought current through closing.
How it was packaged
Blue Fox presented the request to a bridge lender that works with developers on transitional office product. The term sheet was signed and the deposit wired within days. The lender’s closing list went to the developer the same day and came back in an indexed shared folder, which let the lender order loan documents within four days. Blue Fox then worked the title issues in parallel: the earlier payoffs were documented and removed by supplement, and the junior lender was walked through why the record showed double its debt and agreed to subordinate one lien and reconvey the other. Loan documents were signed at the developer’s office once the subordination was in hand.
The outcome
The $12,000,000 loan funded about nine weeks after the term sheet was signed. The first mortgage was paid off, the junior lender stayed subordinate, and the developer kept both buildings and the entitlement moving under a first-position bridge loan.
Similar scenario?
If you own commercial property with a loan coming due, a junior lien behind it, or a map or entitlement still in process, send us the address, the current debt and your exit. We will tell you which bridge programs may fit and what the file will need. Start on our commercial bridge loans page or contact us.
Send us your scenario
Tell us about the property, the loan and your timeline and a loan advisor will follow up. Term sheets are subject to review and lender approval and are not a commitment to lend.
This case study describes a completed transaction. Borrower details are anonymized. Past results do not guarantee future results. Each transaction depends on the property, the borrower and lender approval. Blue Fox Capital Corporation arranges and places financing for real estate investors, commercial property owners and California homeowners. Blue Fox Capital Corporation is a licensed California mortgage broker (DRE 01527288, NMLS 1840487). On select correspondent loan programs it is the direct lender named on the loan documents. We confirm the role for your loan before anything is submitted. Daniel Eckhouse, NMLS 217328 | CA DRE 01977403. This page is general information, not an offer, a rate quote, a loan approval or advice for your situation. Programs, terms and availability vary by property, borrower and lender and are subject to qualification and lender approval. Not all applicants will qualify. The business-purpose loans discussed are not available for a home you live in or plan to live in. Equal Housing Opportunity. 66350 Pierson Blvd, Suite A, Desert Hot Springs, CA 92240 | (310) 756-3619 | dan@bluefoxcapital.com