Remington Capital – Brad Sweet

Perception is reality. Just look at the negative perception “Nervous Nellie” banks are creating about the increasingly poor prospects for financing commercial properties along the BP-oil-inundated Gulf Coast. Even big name lenders are feeding the perception that owners and developers of coastal commercial property have a better chance of finding a date on a deserted island than a bank willing to finance or refinance a commercial project on that 600-mile stretch of coastal property.

That’s one perception; a negative one. Here’s another; a brighter one. “If banks can’t or won’t support the financing needs of distressed commercial properties on the Gulf Coast,” Andy Bogdanoff said, “then private capital may well be the best way for many owners and developers to avoid bankruptcy. And Remington, with hundreds of well-heeled sources of private capital in its global network, is reputed to be the best source of commercial capital in the country, particularly for those unable to find traditional financing.”

With commercial real estate values in the Gulf Coast area expected to fall another 10% on top of the 40% or so drop experienced already nationwide since 2007, “Many of the entrepreneurial lenders and investors we work with are biting at the bit to enter the Gulf Coast’s artificially low market,” Andy explained. “They see the Gulf Coast market as a huge investment opportunity, particularly as more and more banks become increasingly willing to discount or even walk away from existing loans.”

Every lender has different requirements and different algorithms they will use to calculate whether the risk of any given transaction is within their tolerance. It is important to get them a good package for the initial application so they can quickly look at your file, understand it, and make a decision.

Here at Remington we have a standard submission form which helps us to pull out all the pedigree information on the transaction such as NOI, loan amount, value of collateral and exit strategy. It also explores other items such as potential ownership possibilities, IRR and cash invested to date.

Along with the submission form most lenders will request an executive summary, a business plan, pro-forma, tax returns (corporate and personal), an appraisal, and any other pertinent documents that should be provided.

Remember to start with the most general information first (submission form, executive summary and business plan) and move forward towards to more detailed information. You want the lender to quickly get an understanding and not have too much information to sift through. Many files may get disregarded with not submitted correctly so be sure to ask the representative you are speaking with about what he wants to see.