{"id":1004141242,"date":"2016-04-07T05:36:41","date_gmt":"2016-04-07T13:36:41","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004141242"},"modified":"2022-12-04T15:55:21","modified_gmt":"2022-12-04T23:55:21","slug":"non-traditional-loans-where-creativity-and-flexibility-fill-the-gaps","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/non-traditional-loans-where-creativity-and-flexibility-fill-the-gaps\/","title":{"rendered":"Non-Traditional Loans: Creativity, Flexibility Fill the Gaps"},"content":{"rendered":"

By Bradley Ross, Vice President, Calmwater Capital<\/p>\n

\"Brad-Ross<\/a>With a maturing economic cycle and a recent decrease in liquidity throughout the capital markets, new and unique investment opportunities are arising for investors and developers. With stricter\u00a0regulations on banks and increasingly stringent underwriting standards from CMBS B-piece buyers, borrowers are searching for more creative and flexible capital solutions that can perform when traditional financing sources fall short.<\/p>\n

In our first year as Calmwater Capital<\/a>, a Los Angeles-based provider of CRE debt, we have found this more flexible lending approach has helped us close a number of deals that wouldn\u2019t otherwise be possible through a traditional lender. Several deals stand out as key examples of this fresh solution to closing transitional and value-add investment opportunities:<\/p>\n

Creative big-box acquisition<\/strong><\/p>\n

A borrower who\u00a0plans to purchase and lease up a nearly vacant big-box retail center needed time to curate the property with a new rent roll of smaller tenants after the close of escrow. Given the trend among retailers to move to smaller brick-and-mortar locations, this borrower recognized the opportunity to maximize value by devising a large single-tenant former grocery store into a dynamic, multi-tenant center that would be a superior fit in the community. The cost of executing this plan, however, was difficult to estimate when leases with potential tenants were still in negotiation.<\/p>\n

In this case, separate construction and lease-up budgets were created for varying re-tenanting scenarios. With little in-place cash flow and a construction component, this financing was beyond the capability of traditional lenders and was a perfect fit for a non-traditional lender like Calmwater Capital. By structuring the loan with minimum leasing guidelines and an interest reserve, and providing future capital expenditure financing with no \u201cnegative-arb,\u201d Calmwater allowed its borrower maximum flexibility to execute an optimal business plan.<\/p>\n

Refinancing a hotel during construction<\/strong><\/p>\n

Three-quarters through construction, a hotel developer secured new operating partners who were significantly more desirable than those included in the previous underwriting process. As a result, both the value and capital needs of the unfinished hotel increased significantly.<\/p>\n

Having already raised enough capital to finance the original project estimate, the borrower needed flexible financing to fill the gap. This required a lender with the flexibility, creativity and ability to enter and propel forward an active construction project. Calmwater Capital was able to mitigate the challenge of stepping into an ongoing project by taking a senior-secured position at an attractive basis.<\/p>\n

Funding multiple acquisitions<\/strong><\/p>\n

The end of 2015 was marked by a flurry of deal activity and brought unique capital needs to the forefront. In some cases, investors sought financing for multiple projects at the same time. One experienced investor in particular was contracted to close deals on four separate properties from different sellers within a short time period. Two of the properties were even scheduled to close on the same day.<\/p>\n

To simplify the process, the borrower sought to finance all four transactions with a single loan from one lender. In order to meet this need, the borrower enlisted Calmwater Capital and received the certainty of execution necessary to close on all four properties. Calmwater Capital provided a highly structured loan that\u00a0allocated funds to each property to provide business-plan flexibility to the borrower and downside protection for the lender.<\/p>\n

Throughout 2016, borrowers will be faced with variations of the above scenarios and more. While borrowers requiring high leverage and quick closings are the lifeblood of many private lenders, many non-bank financing executions, like these, are won as a result of a lender\u2019s ability to execute highly structured, creative deals.<\/p>\n","protected":false},"excerpt":{"rendered":"

By Bradley Ross, Vice President, Calmwater Capital: Stricter bank regulations and underwriting standards have led borrowers to pursue more creative financing solutions. Here are a few examples.<\/p>\n","protected":false},"author":1405,"featured_media":1004141244,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21825,23891,21684],"tags":[],"class_list":["post-1004141242","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","category-national","category-viewpoint"],"acf":[],"yoast_head":"\nNon-Traditional Loans: Creativity, Flexibility Fill the Gaps - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/non-traditional-loans-where-creativity-and-flexibility-fill-the-gaps\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Non-Traditional Loans: Creativity, Flexibility Fill the Gaps\" \/>\n<meta property=\"og:description\" content=\"By Bradley Ross, Vice President, Calmwater Capital: Stricter bank regulations and underwriting standards have led borrowers to pursue more creative financing solutions. Here are a few examples.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/non-traditional-loans-where-creativity-and-flexibility-fill-the-gaps\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2016-04-07T13:36:41+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-12-04T23:55:21+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2016\/04\/Brad-Ross-reag.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"800\" \/>\n\t<meta property=\"og:image:height\" content=\"736\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Bradley Ross\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/non-traditional-loans-where-creativity-and-flexibility-fill-the-gaps\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/non-traditional-loans-where-creativity-and-flexibility-fill-the-gaps\/\",\"name\":\"Non-Traditional Loans: Creativity, Flexibility Fill the Gaps - Commercial Property Executive\",\"isPartOf\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/non-traditional-loans-where-creativity-and-flexibility-fill-the-gaps\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/non-traditional-loans-where-creativity-and-flexibility-fill-the-gaps\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2016\/04\/Brad-Ross-reag.jpg\",\"datePublished\":\"2016-04-07T13:36:41+00:00\",\"dateModified\":\"2022-12-04T23:55:21+00:00\",\"author\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/145f2c120e5a1a665d98c0696d61dfd2\"},\"breadcrumb\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/non-traditional-loans-where-creativity-and-flexibility-fill-the-gaps\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.commercialsearch.com\/news\/non-traditional-loans-where-creativity-and-flexibility-fill-the-gaps\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/non-traditional-loans-where-creativity-and-flexibility-fill-the-gaps\/#primaryimage\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2016\/04\/Brad-Ross-reag.jpg\",\"contentUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2016\/04\/Brad-Ross-reag.jpg\",\"width\":800,\"height\":736},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/non-traditional-loans-where-creativity-and-flexibility-fill-the-gaps\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.commercialsearch.com\/news\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Non-Traditional Loans: Creativity, Flexibility Fill the Gaps\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#website\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/\",\"name\":\"Commercial Property Executive\",\"description\":\"\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.commercialsearch.com\/news\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/145f2c120e5a1a665d98c0696d61dfd2\",\"name\":\"Bradley Ross\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/240057207743d7773b02e62790f9163041b22adee82c9252637da6670b9a3acc?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/240057207743d7773b02e62790f9163041b22adee82c9252637da6670b9a3acc?s=96&d=mm&r=g\",\"caption\":\"Bradley Ross\"},\"url\":\"https:\/\/www.commercialsearch.com\/news\/author\/bradleyross\/\"}]}<\/script>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"Non-Traditional Loans: Creativity, Flexibility Fill the Gaps - Commercial Property Executive","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.commercialsearch.com\/news\/non-traditional-loans-where-creativity-and-flexibility-fill-the-gaps\/","og_locale":"en_US","og_type":"article","og_title":"Non-Traditional Loans: Creativity, Flexibility Fill the Gaps","og_description":"By Bradley Ross, Vice President, Calmwater Capital: Stricter bank regulations and underwriting standards have led borrowers to pursue more creative financing solutions. Here are a few examples.","og_url":"https:\/\/www.commercialsearch.com\/news\/non-traditional-loans-where-creativity-and-flexibility-fill-the-gaps\/","og_site_name":"Commercial Property Executive","article_publisher":"https:\/\/www.facebook.com\/CPExecutive","article_published_time":"2016-04-07T13:36:41+00:00","article_modified_time":"2022-12-04T23:55:21+00:00","og_image":[{"width":800,"height":736,"url":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2016\/04\/Brad-Ross-reag.jpg","type":"image\/jpeg"}],"author":"Bradley Ross","twitter_card":"summary_large_image","twitter_creator":"@cpexecutive","twitter_site":"@cpexecutive","schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/www.commercialsearch.com\/news\/non-traditional-loans-where-creativity-and-flexibility-fill-the-gaps\/","url":"https:\/\/www.commercialsearch.com\/news\/non-traditional-loans-where-creativity-and-flexibility-fill-the-gaps\/","name":"Non-Traditional Loans: Creativity, Flexibility Fill the Gaps - Commercial Property Executive","isPartOf":{"@id":"https:\/\/www.commercialsearch.com\/news\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.commercialsearch.com\/news\/non-traditional-loans-where-creativity-and-flexibility-fill-the-gaps\/#primaryimage"},"image":{"@id":"https:\/\/www.commercialsearch.com\/news\/non-traditional-loans-where-creativity-and-flexibility-fill-the-gaps\/#primaryimage"},"thumbnailUrl":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2016\/04\/Brad-Ross-reag.jpg","datePublished":"2016-04-07T13:36:41+00:00","dateModified":"2022-12-04T23:55:21+00:00","author":{"@id":"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/145f2c120e5a1a665d98c0696d61dfd2"},"breadcrumb":{"@id":"https:\/\/www.commercialsearch.com\/news\/non-traditional-loans-where-creativity-and-flexibility-fill-the-gaps\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.commercialsearch.com\/news\/non-traditional-loans-where-creativity-and-flexibility-fill-the-gaps\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.commercialsearch.com\/news\/non-traditional-loans-where-creativity-and-flexibility-fill-the-gaps\/#primaryimage","url":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2016\/04\/Brad-Ross-reag.jpg","contentUrl":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2016\/04\/Brad-Ross-reag.jpg","width":800,"height":736},{"@type":"BreadcrumbList","@id":"https:\/\/www.commercialsearch.com\/news\/non-traditional-loans-where-creativity-and-flexibility-fill-the-gaps\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.commercialsearch.com\/news\/"},{"@type":"ListItem","position":2,"name":"Non-Traditional Loans: Creativity, Flexibility Fill the Gaps"}]},{"@type":"WebSite","@id":"https:\/\/www.commercialsearch.com\/news\/#website","url":"https:\/\/www.commercialsearch.com\/news\/","name":"Commercial Property Executive","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.commercialsearch.com\/news\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/145f2c120e5a1a665d98c0696d61dfd2","name":"Bradley Ross","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/240057207743d7773b02e62790f9163041b22adee82c9252637da6670b9a3acc?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/240057207743d7773b02e62790f9163041b22adee82c9252637da6670b9a3acc?s=96&d=mm&r=g","caption":"Bradley Ross"},"url":"https:\/\/www.commercialsearch.com\/news\/author\/bradleyross\/"}]}},"jetpack_featured_media_url":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2016\/04\/Brad-Ross-reag.jpg","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/posts\/1004141242","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/users\/1405"}],"replies":[{"embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/comments?post=1004141242"}],"version-history":[{"count":1,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/posts\/1004141242\/revisions"}],"predecessor-version":[{"id":1004624082,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/posts\/1004141242\/revisions\/1004624082"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/media\/1004141244"}],"wp:attachment":[{"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/media?parent=1004141242"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/categories?post=1004141242"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/tags?post=1004141242"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}