This service includes:
- Permanent Mortgage Loans
- Construction and Development Financing
- Credit Tenant Lease Financing
- Owner/User Secured Mortgage Loans
- Tax exempt Bond Financing
Access to mortgage capital and the proper structuring of debt in acquisitions and refinancing is tantamount to success in today’s capital-constrained real estate markets.
Wye Realty Advisors’ principals have relationships with institutional lenders and local banking institutions to offer the greatest flexibility in addressing its investors’ borrowing needs.
These relationships, combined with demonstrated expertise in structuring complex transactions, enables Wye Realty to place debt financing for operating properties, construction/development projects, owner/user facilities, and tax exempt organizations.
Services Provided:
Project Outline:
Wye Realty Advisors represented the Gift of Life Donor Program (GLDP) in obtaining construction and permanent mortgage financing for the development of the not-for-profit organization’s 101,000 SF headquarters facility in Philadelphia.
The financing was structured as a public placement of Variable Rate Demand Notes (VRDN) by TD Bank’s capital markets desk (formerly Commerce Cap. Mrkts.), affording a low floating tax exempt interest rate, while achieving a 30 year term and associated amortization schedule. Credit enhancement to the bondholders is provided by TD Bank, which holds a first secured mortgage position in the underlying realty and administered disbursement of bond proceeds for construction and related project costs.
Value Added:
Focusing on the client’s need for a construction loan and follow-on permanent mortgage financing, and taking advantage of the organization’s 501(c) 3 tax exempt status, we evaluated and advised GLDP on current capital market conditions and available financing instruments. With a VRDN in mind, we developed a “short list” of qualified financial institutions to provide the financing; emphasis was placed on the strength and the credit rating of the prospective banks providing letter of credit enhancement and the distribution capabilities of their investment banking affiliates, as underwriter/remarketing agent for the bonds. Leveraging the financial strength of the borrower, Wye Realty developed a competitive bid process and established a strong negotiating platform for the client in order to achieve best pricing and flexible terms.
Upon GLDP’s acceptance of the financing commitment, Wye directed the documentation of the transaction through closing, including coordination of the “working group” of attorneys, investment bankers, bankers and appraisers participating in the transaction.
After closing, Wye worked with the borrower and the LOC provider to put “draw” procedures in place for disbursement of bond proceeds to fund project costs and, on an ongoing basis, monitors capital market conditions and opportunities to affect attractive fixed rate financing via future interest rate swaps.
Project Outline:
Wye Realty Advisors represented Penguin Industries in sale of a 151,000 SF industrial building in the Pencader Corporate Park in Newark, DE. The two tenant building was 100% leased at the time of sale. Wye Realty guided the client on the sale of the majority interests in the asset, while facilitating the retention of a minority interest by a partner who wanted to maintain its investment.
In addition to facilitating the sale of the property, Wye Realty managed the process of arranging mortgage financing for the project, including evaluation of the assumption of the existing in-place loan vs. other competing loan proposals. This process involved evaluation of pre-payment penalty scenarios wherein the existing in-place loan might be replaced by new financing.
Wye Realty Advisors prepared offering materials, including detailed financial projections for presentation to a select list of private buyers with interest in the local market and product type, as well as structures that might permit the retention of the existing partner’s minority interest. Via solicitation of interest from this limited pool of purchasers, Wye was able to identify a qualified buyer with capacity to assume the existing in-place mortgage, and to achieve an expeditious closing.
In addition, Wye evaluated existing debt terms on the to-be-assumed mortgage and projected new debt terms/capacity for the asset, net of prepayment costs associated with extinguishing the existing loan. Based on the above, Wye Realty assisted the purchaser in procuring new mortgage financing for the project, with a lower Net Present Cost (NPC) of borrowing, even after factoring in the cost to the parties to prepay the existing loan with penalties.
Value Added:
Wye Realty Advisors sourced a qualified purchaser for the majority interests in an modestly sized investment real estate opportunity, including pairing the seller with a buyer who would permit retention of a minority interest by an existing partner. Wye Realty then conducted comparative analysis of the existing financing vs. new mortgage loan options and participated in placing new debt on the asset to provide lowest NPCost financing for the acquiring entity.
Wye Realty Advisors understands the multiple roles in the commercial real estate process. Accordingly, we tailor our services to the client’s needs, including acquisitions advisory, effectively “buy side” representation.
Wye Realty Advisors understands the land use process and the supply/demand characteristics of local markets which, in turn, drive approvals and land values.
Wye Realty Advisors’ professionals maintain relationships with a large contingent of owners and equity investors, including institutions, REITs, developers, and private real estate owners, as well as high net worth individuals.