Remington Capital – Brad Sweet

Thank you to all the brokers I’m working with for your interest and participation in the Distressed Owner Recapitalization (DOR) Program. I’m elated that we can help you find financing even in these market conditions!

The good transaction flow that Remington has been able to maintain is a result of creativity, hard work and our unmatched access to commercial capital. And we’re not stopping here. The Capital Markets Group at Remington continues to expand our access to active lending institutions – making the lives of our brokers and their clients better every day.

We have a backlog of funding that we’re busy with our brokers finding commercial property owners.

Three web seminars are available 24/7 that explain how you too can benefit from our access to funding at part of the DOR Program.  Here they are – feel free to contact me any time and let’s discuss how we can help you.

1) Distressed Owner Recapitalization Program intro video from Remington by Tyler Hufford https://remingtonfg.ilinc.com/register/zrwpcvp

2) Webinar on Recapitalizing Distressed Owners is now available online, by Donavon Ostrom of Remington https://remingtonfg.ilinc.com/register/jyyfswv

3) Webinar on Marketing to Distressed Owners for the DOR Program is now available online, by Shayne Fowler of Remington https://remingtonfg.ilinc.com/register/xhcwzpv

Thank you!  Brad Sweet – Remington

Here at Remington we recognize that the volatile and down economy has put many private companies into a tight spot.  They end up with too much bank debt as business volume and profits contract.  But lower earnings mean that company owners who would have been ready to sell their companies now can’t do it because they end up with too little equity after paying off their banks.

So a key question is, how can you reduce your bank debt and improve your cash flow while you wait for the outside economy and your earnings to recover?  One potential answer where Remington can help is with mezzanine debt.

Mezzanine debt gets its name from being halfway between senior bank debt and equity.  Because it’s kind of both, it can serve you well in certain situations.  Mezzanine is semi-permanent capital, like equity, so the company does not have to make monthly or quarterly payments of principal.  It usually has a 5 to 7 year term.

Senior lenders, like banks, look at mezzanine, or “mezz”, as equity because it is semi-permanent capital and because it is subordinated to the bank debt, which means that the bank gets paid first in the case of a problem.

For owners, mezz looks like debt,because it often does not dilute the ownership of the company like selling stock would do.

So a new investment of mezzanine debt can pay off some of the burdensome other bank debt with a more patient capital that doesn’t come with a reduction in ownership like selling equity brings.

Mezzanine lenders are very busy these days because their product is good for this market.  A well-structured mezz investment will reduce a company’s leverage, improve immediate cash flow, and preserve the equity of a business for a sale a couple years down the road.

So, what’s not to like?  It’s a little expensive.  Compared to a bank loan, mezz carries an interest rate in the range of 12% to 14% depending on the deal.  That’s more expensive than a bank, but the cash flow is often better because the principal does not need to be repaid until the end.  And those interest rates are less expensive than selling ownership shares in a company with depressed valuation.  Sometimes mezz deals include an “equity kicker” that give the lender options to buy stock at a fixed value so that there’s an extra return when you sell the company down the road.  That’s not a bad thing because it brings in an experienced investor who shares your goal of a good-paying exit event.

If your bank is making you nervous, or if you are making them nervous, or if you just want to strengthen your balance sheet as you wait for the market to recover, a mezzanine investment could be the answer.  Let me know if you have questions, and I’d enjoy speaking with you about whether a mezz is in your future.

Remington has since 1993 secured hard money capital and financial services for real estate owners and developers worldwide. Remington is an expert in hard money loans, a higher-risk loan that usually is based on the quick-sale value of a property. Hard money loans are often issued for financially distressed properties.

We recommend hard money loans in cases where there is sufficient collateral and a promising business or financial plan. Remington offers an extensive network of private and public lending partners, dramatically improving close rates for borrowers in need of a fast-closing loan. With a successful track record of closing hard money transactions, Remington delivers competitive transaction options even in these challenging market conditions.

Hard money loans may be issued for non-traditional properties or borrowers – including property owners who may have missed a mortgage payment or real estate developers that are looking for immediate support.

We look for companies that operate in expanding market sectors including specialty manufacturing, resource development and service providers. Remington will consider securing financing on a diverse variety of commercial properties including mixed-use, apartment buildings, assisted care facilities, business investment capital, corporate loans, commercial real estate, special purpose properties (such as car washes), construction loans, hotels, land development, retail, office and industrial properties.

A hard money loan is easily recognized by distinguishing characteristics including its ability to close quickly. Although a hard money loan typically carries more costly rates and fees, borrowers continually turn to this specialty loan because it can move from start to close in 30 days.

If you are looking to move quickly to take advantage of a low-cost property, to avoid foreclosure or any other issue, please give me a call and let’s discuss the hard money option.  Thank you – Brad Sweet

One of the timeless dilemmas in commercial lending that we see at Remington is determing loan to cost vs. loan to value.  We’ve been calculating those in commercial property lending since our firm was founded in 1993.

When determining the risk in a particular investment, emphasis will be placed on the value of the collateral. For a new purchase this is a simple process because the borrower will be bringing a percentage of the acquisition price in as a down payment.

However in today’s market, how do we determine the value of a commercial property when it is often being purchased for pennies on the dollar?

An example is a borrower purchasing an apartment building for $6,000,000 from a bank when the apartment building is worth $7,000,000. If the borrower brings a down payment to the purchase that satisfies the commercial lender’s traditional requirements, there is no problem and the loan is approved.  A problem will arise if the borrower wants the difference between value and cost ($1,000,000) to be considered as a down-payment.

Most lenders take the stance that a property’s value is the purchase price. So if a buyer can purchase a property for $6,000,000 it is worth $6,000,000. In situations like this where the borrower is looking to get credit for purchasing under the perceived market value, we must be able to sell the lender/investor on the story that this property is worth more than the purchase price.

Three standard methods for determining the value of an apartment building in this situation would be to

1. Use a gross rent multiplier
2. Use the capitalization rate for the area
3. Determine the value using price per unit

The experts at Remington have long and deep experience is these scenarios and can help borrowers structure commercial lending transactions like this. We have lenders actively pursuing and completing financing deals across the entire range of the capital stack up to 100% Loan to Cost. For further information, apartment financing or any other types of commercial transactions please feel free to contact me directly.

Thank you!  Brad Sweet – Remington

Like other account executives at Remington, I’ve been spending more time with brokers who are assisting owners of hospitality properties. Those owners are looking for relief from lower revenue and falling property values. Brokers are seeking fresh access to active capital sources – which we can provide.

It’s estimated that $3.5 billion in hospitality loans are currently delinquent (60 days late).  Just one month ago the value was $3 billion, an increase of $500 million in just 30 days.

This shows that the hospitality sector is steadily taking a turn for the worse. The total number of delinquent commercial loans is at $17.8 billion across all industries and rising steadily.  Either the banks will have to extend these notes, take a lower pay-off or foreclose.  Either way, the outlook is not good for them or the owners.

At Remington we’re finding traction with the Distressed Owner Recapitalization (DOR) Program with brokers who are seeking to support hospitality sector owners.  Our Chairman Andy Bogdanoff recently spoke to a national group of commercial real estate experts and had these comments about the overall problem:  

“With U.S. banks in a deep and continuing liquidity crisis and with $1.2 trillion in commercial debt due to mature by 2013, thousands of real estate owners and developers across the country will soon find themselves between a rock and a hard place when their loans mature,” Andy Bogdanoff of Remington told a meeting of industry representatives.

Bogdanoff, who has been in the financial services industry for 35 years, founded Remington in 1993.  “Even if bank liquidity weren’t an issue, estimates are that two-thirds of the securitized loans and half of the whole loans due to mature between 2010 and 2013 would not qualify for refinancing due to today’s more stringent banking standards,” Bogdanoff said.

Bogdanoff added that the unprecedented high cost of funds, coupled with a 40% decline in real estate values since 2007, further compounds the problem. “With property values less than the original debt, thousands of owners and developers may have no choice but to sell their properties or face bankruptcy when their loans mature. If the problem isn’t solved soon, the result could be a disaster for the commercial real estate industry and the U.S. economy as a whole.”

Reach out to my team and let’s find a financing solution right for you and your client(s).  Thank you.

Brad Sweet – Remington

At Remington we support commercial property owners and developers through a series of brokers in the U.S. and around the world. Our company, led by Chairman Andy Bogdanoff, has been successful since 1993 to secure hard money capital and financial services for real estate owners and developers worldwide through our wide broker network.

We specialize in hard money loans, a higher-risk loan that usually is based on the quick-sale value of a property. Hard money loans are often issued for financially distressed properties. We recommend hard money loans in cases where there is sufficient collateral and a promising business or financial plan.

We offer an unmatched network of lending partners, dramatically improving successful close rates for borrowers in need of a fast-closing loan. We work with hundreds of active lenders. With a successful track record of closing hard money transactions, Remington delivers competitive transaction options even in these challenging market conditions.

Hard money loans may be issued for non-traditional properties or borrowers – including property owners who may have missed a mortgage payment or real estate developers that are looking for immediate support.

We partner with companies that operate in expanding market sectors including manufacturing, green technologies and service providers. Remington will consider securing financing on a diverse variety of commercial properties including mixed-use, apartment buildings, assisted care facilities, business investment capital, corporate loans, commercial real estate, special purpose properties (such as car washes), construction loans, hotels, land development, retail, office and industrial properties.

A hard money loan is easily recognized by distinguishing characteristics including its ability to close quickly. Although a hard money loan typically carries a higher loan to value and more costly rates and fees, borrowers continually turn to this specialty loan because it can move from start to close in 30 days.

If you are looking to take advantage of a low-cost property or to avoid foreclosure, please give me a call and let’s discuss the hard money option.  Thank you.  Brad Sweet

Hello I’m Brad Sweet, Account Executive at Remington. My goal is to provide the best financial services possible to clients in a variety of industries.

I’ve learned that sacrifice, dedication and hard work get great results. And so my promise to clients is that we will always work hard and smart to get transactions done by creating more access to commercial capital than they will get anywhere else.

You’ll see on my bio page that I play jazz piano and guitar. I’ve seen where that experience helps me think more out-of-the-box. Most of our clients have exhausted all the typical approaches to obtaining capital before they come to us, and so when they call we’re often a ‘last resort’. I’m more than OK with that because we get it done for problematic transactions with solutions all across the capital stack.

I welcome you to learn more about Remington at our main website www.remingtonfg.com or at the variety of other websites that support our clients. Also please feel free to contact me at any time – we’re here to help. 

Thank you – Brad Sweet, Remington